Commodity online exchange Kyiv Mercantile Exchange – KME: the results of the first week of July 2019 in the markets of mineral fertilisers in Ukraine and the world.
News overview in the world fertiliser market. Main events of the week:
- The world market is on the verge of falling prices;
- Urea from the Baltic will be supplied to Mexico and India;
- Prices for phosphorus in the US continue to decline;
- In India, subsidies for the purchase of fertilizers to agrarians will increase by 14%.
India is the world’s leading market. Once again, the country buys the remnants of free goods to provide for August. Floods in the country may delay purchases, but the overall volume of needs will not decrease. Increasing subsidies by 14% have allowed international traders to expect price stability and guaranteed purchase of urea. MMTS has bought 1.69 million tons of urea at a fairly high price – 293-296 USD/t, CFR.
Russian manufacturers also made sales to Mexico and other Latin American countries. From the ports of the Black Sea, the Russian product is sold for 270 USD/t, FOB. At the same time goods were sold to India for 254-256 USD/t, FOB.
Uzbek and Turkmen urea is actively offered on the Black Sea. Proposals for 272 USD/t do not meet customer approvals.
Phosphate fertilisers, continue losing its cost in the United States. During the week, diammonium phosphate fell by 12 USD, 338-340 USD/t, FOB, – offer price for August. The market is partially stabilising in August after purchases in Pakistan and India.
The Belarusian potash company has signed a contract for 450 thousand tons of potassium for delivery to Bangladesh. This is a framework contract, where the formula value depends on and the price of the Chinese contract, the last was signed last September for 290 USD/t, CFR. Chinese and Indian contracts pop up, so we are waiting for new prices for Asia.
News overview in the Ukrainian fertiliser market. Main events of the week:
- The surplus of NPK fertilisers occurs in Ukraine;
- DniproAzot increased its activity in the market by lowering prices;
- Basic phosphate fertilizers are redeemed, rainy weather calms agiotage;
- The grain is going to have worse quality than was expected, although the harvest is satisfactory.
The quality of the harvest is worse than expected, farmers complain about wet fields, rotting and not feed grain. Nevertheless, in general, the picture is better than last years. As of July 15, almost 50% of sown areas were drilled. 15.2 million tons of grain from the area of 4.6 million hectares were collected. According to analysts of the Info Industry, the average yield of harvested rapeseed is 22.2 centners per hectare.
There is a shortage of NPK fertilizers. First of all NPK 16:16:16. The price of this product has increased to 13500 UAH/t, CPT. NPK 10:26:26 is also a deficiency fertilizer, on Monday, July 15, the price increased to 16-16,5 thousand UAH/t, CPT. NPK from Belarus comes rhythmically. But imports from other sources do not yet exist, and own production is growing very slowly.
Phosphate fertilizers are bought up quite actively, there is not enough sulphoammophos, the goods are bought by Ukrainian importers from Romania, Bulgaria, even from Turkey. The cost of the product has grown to 13000 UAH/t, CPT. Competition does not allow to raise the price sharply, but in August we expect a further increase in prices for NP fertilizers.
DniproAzot and other Ukrainian producers do not wait until urea to get cheaper in the foreign market. At the moment, the price of 8600-8800 UAH/t, for large batches of unpackaged urea is relevant.
Lowering prices for saltpetre is delayed, perhaps in August, the situation will be cleared up. So far, Russian suppliers have successfully sold the batch for August, so the pit will be almost unobtrusive and it’s possible to buy saltpetre already soon for the fall. Another issue for spring, purchases can begin as early as September and October.
Ukraine has already shipped the first batch of ammonium sulphate from Belgium, the product was originally sold for 5900 USD/t, EXW, now – 6400-6500 UAH/t, CPT. The average price for quality granular ammonium sulphate starts from 7000 UAH/t, CPT. So prices for a Belgian product are more than attractive.
Note that the review is made on the basis of data from the tenders and applications for the purchase and sale of the commodity online exchange KME and data analytical group Info Industry.
For reference: Kyiv Mercantile Exchange – the newest Ukrainian online exchange. Realises the world standards of stock trading in the Ukrainian markets of agricultural, chemical and petroleum products. As of end of May 2019, the total turnover of trades in Kyiv Mercantile Exchange exceeded UAH 6,3 billion.