Market and product

Compiled by Bao Hien

Fertilizer prices in the United States and Brazil kept rising in October, and some farmers in Pakistan have switched to cheaper products, while phosphate shipments from Saudi Arabia through the Strait of Hormuz are gradually resuming.

US fertilizer prices continue to climb

According to a DTN survey cited by RFD-TV on November 2, prices of seven of the eight major fertilizers in the United States rose in October. UAN28, a liquid nitrogen fertilizer, posted the largest increase, about 6%, to an average of $447 per ton. Anhydrous ammonia reached $987 per ton, while potash stood at $506 per ton.

Compared with a year earlier, all eight fertilizers are more expensive. Anhydrous ammonia is up 17% and urea is up 13%. Input costs continue to put pressure on US farmers as they draw up budgets for the next growing season.

Brazilian urea prices pressured by the gas market

In Brazil, imported urea prices rose to $476–488 per ton CFR, from $464–482 per ton a week earlier, according to a Nobel Trading report dated October 26.

Domestic demand remained weak as buyers held back ahead of the October 25 presidential runoff. As a result, the price increase came mainly from external factors, particularly energy costs.

On October 20, Dutch TTF gas prices topped €90/MWh, pushing the estimated cost of producing urea in northwest Europe to about $740 per ton, up from $678 per ton. While Chinese cargoes were offered at $470–475 per ton in limited volumes, urea from Qatar and Nigeria was priced at $485–500 per ton.

Traders are also closely watching imports by India, one of the world’s largest urea markets. In its October 7 tender, the country bought only about 410,000 tons, well below its target of 1.7 million tons. The market is awaiting the next tender, expected between late October and mid-November.

In the first nine months of the year, Brazil’s combined imports of urea and ammonium sulfate fell 21% year on year to 7.95 million tons.

Pakistani farmers turn to lower-cost fertilizers

In Pakistan, the price of DAP, the main phosphate fertilizer for wheat, has risen 23% since the Middle East conflict broke out on February 28.

According to Fauji Fertilizer price lists, a 50-kg bag of DAP rose from Rs14,009 to Rs17,183, or from about $51 to $62. Actual retail prices have approached Rs18,000 per bag.

Faced with higher input costs, some farmers have switched to 23-23 nitrophosphate, which costs about Rs10,500 per bag, roughly 42% less than DAP.

In the first nine months of the year, DAP sales in Pakistan fell 3% year on year to 775,000 tons.

Pakistan produces about 800,000 tons of DAP a year and imports nearly half of its total demand of around 1.5 million tons. To ease cost pressure on growers, the Sindh provincial government is providing a subsidy of Rs4,000 per acre to smallholders farming between 1 and 25 acres.

Phosphate exports from the Gulf gradually recover

On the supply side, phosphate shipments from the Gulf through the Strait of Hormuz are showing signs of improvement.

According to Argus Media on October 29, the vessel Panamax Breeze loaded about 55,000 tons of phosphate fertilizer, likely DAP, at Saudi Arabia’s Ras Al-Khair port on October 23–24, then passed through the Strait of Hormuz bound for Kakinada in India.

In October, at least three other DAP cargoes from Ras Al-Khair, of 60,000, 76,000 and 54,000 tons respectively, also arrived at the Indian ports of Mundra and Kandla.

Earlier in October, mining group Ma’aden sold three DAP cargoes totalling 120,000 tons to Indian importers at $900–904 per ton CFR.

According to Argus, the shipments show that phosphate exports from the Gulf are recovering step by step. However, traders remain reluctant to buy cargoes delivered at Ras Al-Khair.

New plants to diversify supply

Meanwhile, several new fertilizer production projects are moving ahead with the aim of reducing dependence on imports.

On October 20, United Capital Fertilizer, a subsidiary of China’s Wonderful Group, broke ground on the second phase of its plant expansion in Chilanga, Zambia, with a total investment of $1.6 billion.

Once completed, the complex is expected to have an annual capacity of 540,000 tons of ammonia, 520,000 tons of urea, 400,000 tons of ammonium nitrate and 50,000 tons of food-grade CO₂. Construction is expected to take about three and a half years, with operations starting around 2030.

In India, GAIL and Rashtriya Chemicals and Fertilizers signed a memorandum of understanding on November 2 to study the construction of a gas-based fertilizer plant in the state of Maharashtra. The project aims to raise domestic production capacity and reduce reliance on imported fertilizers. Its design capacity, total investment and timeline have not yet been disclosed.