Global fertiliser markets are still absorbing the impact from a number of events that took place within the industry last year, prompting prices to continue their upward trend.
Since the end of October 2017 the price of phosphate has increased by US$60 per tonne as the market continues to factor in the potential looming supply gap. Urea in the same period has fallen from US$295/t down to US$217/t, and is now back up to US$250/t, truly showing its volatile colours and again keep markets guessing on Indian and Chinese demand and supply.
Between eight and 10 million of tonnes of phosphate and urea are forecast to be taken out of the global market in 2018 on the back of the Chinese government continuing to clamp down on its factories to lower pollution levels and enforce higher environmental standards. In addition the shutdown of a major phosphate plant in Florida by major US producer Mosaic is also biting supply.
Combined with this is China’s deepening winter heating crisis, resulting in natural gas shortages that have forced many gas-based fertiliser plants to close, tightening supplies and pushing up prices in the world’s top agricultural market.
It’s reported the closure of the plants has prompted China’s state planner to ask local governments and companies to ensure fertiliser output for the country’s spring planting season. The country has also announced a plan to stockpile five million tonnes during February and April for their domestic market.
The result of the plant closures is that fertiliser output in China has dropped 7 per cent from a year ago to 4.75 million tonnes in December, according to the National Bureau of Statistics. The volume was also down 9.3 per cent from the previous month’s 5.24 million tonnes.
Meanwhile, a delay to the expected new production of mono-ammonium phosphate (MAP) and di-ammonium phosphate (DAP) from Saudi Arabia and Morocco is adding to projections of a looming supply gap. Reports are that the new production from both will come online in the second half of 2018.
While these market forces from China, Saudi Arabia and Morocco will add some volatility to the global fertiliser market in the months to come, it’s anticipated the market will equalise around September and October this year.
The CBH Group launched CBH Fertiliser to focus on reducing costs for growers. With fertiliser being a major farm input cost for growers, the aim is to provide it at a competitive price to help reduce on-farm costs.
CBH Fertiliser has a wide range of fertiliser products that are tested to ensure growers’ get the best quality product for their business. There is also the option of getting low cost finance with CBH’s Grain for Fert option, where growers can free up their farm capital by using future grain sales to help finance putting the crop in.
For more information on CBH Fertiliser, you can call our Growers Service Centre on 1800 199 083, or contact your local Business Relationship Manager.