IndexBox has just published a new report: ‘World – Fertilizers – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.
Fertilizer prices continue to ramp up due to a shortage in supply caused by lower output in EU countries. High natural gas costs shape that growth because gas accounts for up to 80% of variable costs in nitrogen fertilizer production. Urea prices spiked exceptionally high to $900 per tonne in November 2021, gaining 30% against the previous month. Phosphate rock price rose by 4%, while diammonium phosphate and triple superphosphate were both up by 8%. Next year, fertilizer prices are projected to climb further due to a continued shortage in supply, but if costs for natural gas maintain their downward trend, they will hold the price increases back.
Key Trends and Insights
Fertilizer prices are continuing to rise. According to the December data from the World Bank, the urea price shot upward by 30% in November compared to the previous month, reaching $900.5 per tonne. This is already the second significant gain seen this year. Phosphate rock has also become more expensive by +4% up to $153 per tonne, while diammonium phosphate and triple superphosphate each increased by +8% to $727 and $665 per tonne, respectively.
The key factors driving fertilizer prices up were a supply shortage on the global market and the growing costs of natural gas, which account for up to 80% of variable costs in producing nitrogen fertilizers. Faced with more expensive energy resources, many European producers had to stop production as they couldn’t compete with counterparts in Russia, countries in the Persian Gulf and northern Africa. As a result, the global supply of fertilizer decreased and led to subsequent price increases.
According to the World Bank, in November, the prices for natural gas in the U.S. decreased by -8% to $5.02 per MMBtu, and by -11% in Europe to $27.6 per MMBtu, but despite that, they are still at record highs. If the cost for natural gas declines, it may reduce the rate of price increases in the upcoming months. However, this will not eliminate the long-term upward trend in fertilizer prices as there will still be a shortage in supply.
Global Fertilizer Exports by Country
In 2020, global fertilizer exports amounted to 204M tonnes, increasing by 2% from the previous year’s figure. In value terms, exports dropped to $52.7B (IndexBox estimates)
The largest fertilizer supplying countries worldwide were Russia ($7B), China ($6.3B) and Canada ($5.1B), together comprising 35% of global exports. These countries were followed by the U.S., Morocco, Saudi Arabia, Belarus, Germany, the Netherlands, Belgium, Israel, Oman and Algeria, which together accounted for a further 38%. The shipments of the three major exporters of fertilizers, namely Russia, China and Canada, represented more than a third of total export in physical terms.
Top Largest Importers Worldwide
Brazil (34M tonnes), India (25M tonnes) and the U.S. (23M tonnes) represented roughly 37% of total imports of fertilizers in 2020. It was distantly followed by China (10M tonnes), generating a 4.8% share of total imports. France (7.4M tonnes), Indonesia (6.2M tonnes), Australia (5.2M tonnes), Thailand (5M tonnes), Canada (4.4M tonnes), Turkey (4.3M tonnes), Germany (4.1M tonnes), Argentina (4M tonnes) and Belgium (3.9M tonnes) held small shares of total imports.
In value terms, the largest fertilizer importing markets worldwide were Brazil ($8.6B), India ($7.1B) and the U.S. ($5.6B), together accounting for 36% of global imports. These countries were followed by China, France, Australia, Thailand, Canada, Indonesia, Argentina, Turkey, Germany and Belgium, which together accounted for a further 24%.
Source: IndexBox Platform