The war in the Ukraine continues to push up the prices of nitrogenous fertilizers, also catalysed by increases in the prices of urea from the Maghreb and the Middle East and by the rise in freight costs. Although almost 40% of Terre-net readers were not covered at the end of July for the 2022/23 campaign, the situation is worrying on the plain.
Urea prices have been on the rise since mid-June (©AdobeStock) LThe prices of nitrogenous fertilizers continue their upward movement observed since the beginning of July. On August 12, theurea outlet port thus costing €805/t, ammonium nitrate at 27% ex-factory €700/t and ammonium nitrate at 33.5% ex-factory €880/t.
A situation that saddens farmers, especially since cereal prices are falling and raise fears of a “scissor effect”.
“I covered up on Monday (July 25, editor’s note). I already had 1 semi of solution and a semi of 21/4/4+12 S. There I put my PEL, my A card and my DAT in cardiac arrest with another semi of liquid at €616/t, a semi of urea in BB 798 €/t semi-sulfur ammunition in BB at €733/t,” @cpelleraud wrote on Twitter, for example, at the end of July.
“I bought everything for my N39 at 600 euros, I feel like I got a deal. As a reminder I had bought 150 in 2020 and 300 in 2021. At this rate, next year I’ll buy it for 1,200? ask @michuipasbiau.
Nothing bought yet, what disgusts me the most is last year when they sold ammunition at 750 with a cost price of 200 freaking out the guys with a pseudo shortage. I covered myself at €285, but this year it will not be the same
— Guillaume (@Guillaume_CSC) July 26, 2022
@leskyanous for his part bought “4 trucks at €823/t of ammunition 33.5 + a truck of urea at 890… After buying last year at almost 720 on average… Now I am immune to prices…”. “Not me!, replies @bubu1664. the €15,000 moreI haven’t digested them yet. Well, now we have to prepare for 2023 as well as possible and have good harvests”.
According to a survey proposed from July 19 to 26 on Terre-net, just over 21.4% of readers were then covered with nitrogenous fertilizers for the 2022/23 campaign, while around 39% were not covered No way.
And you, What is your coverage rate? Do prices make you change your buying strategy nitrogen fertilizer? How do you see the 2022/23 campaign?
The war continues to put pressure on the markets
Why have the ammonium nitrate and urea markets remained “in high tension in Europe” in recent days, as Marius Garrigue writes in Terre-net? This is a direct consequence of the war in Ukraine: Russia continues to limit European supplies of natural gasthe basis for the manufacture of nitrogenous fertilizers.
Russia’s gas exports to Europe have fallen to their lowest level in 40 years (©US Energy Information Administration) This generates “a shortage and a rise in prices that paralyzes part of the industry in the Old Continent,” explains the expert. In fact, the instability of Russian gas deliveries and the high volatility of energy prices have “caused thestop a large number of lines of production” in the European Union.
As of July 21, urea production in the EU had already fallen by 40% compared to the pre-war situation, according to Icis, a specialist in energy and chemical product markets.
The list of chemical and fertilizer plants closing or rationing in the EU is impressive. With these gas prices, the list will grow.
According to @ICISOficialaround 40% of urea production may have been reduced in the EU.
Despite a possible recession, food prices will rise. pic.twitter.com/lCmq86YnT2
— Francesco Sassi (@Frank_Stones) August 7, 2022
How will prices evolve?
Other factors contribute to the increase in the prices of nitrogenous fertilizers, points out Marius Garrigue: “the exporters of urea from the Maghreb and the Middle East are rapidly increasing their prices”, and “the increase in the cost of transportation further amplifies inflation.
Although sales and purchases resumed in late July or early August (European buyers placed orders for Egyptian urea in particular), the market is quite Wait and see in recent days: “price volatility and uncertainties about production costs in the medium term do not encourage commitments”.
However, prices could continue to rise and even glow “As soon as Europe wakes up (in terms of purchases, editor’s note), according to analysts at the CRU group.
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