Commodity online exchange Kyiv Mercantile Exchange – KME: the results of the second week of June 2019 in the markets of mineral fertilisers in Ukraine and the world.
News overview in the world fertiliser market. Main events of the week:
- Russian granulated urea was sold for 265-266 USD/t, FOB
- Chinese urea is sold to Ethiopia, and in the Middle East producers are preparing for an Indian tender
- Argentina buys nitrogen fertilisers from the Baltics, and prices for phosphate fertilisers remain under pressure
After India announced a new MTTS tender, prices in the Middle East have become much stable. The market was already ready to lower prices, but China exported expensive granulated urea and was able to implement several agreements to Africa.
This allowed the Egyptians to take advantage of the situation and increase the offer price for Europe to 290 USD/t, FOB. The figures are record-breaking, analysts predict that the bubble of nitrogen prices will burst because neither gas not ammonia did not show the increase in price.
Chinese urea was offered in Ethiopia at prices of 347.47 USD/t, CFR. Interestingly, urea batches from Oman, Turkmenistan and Saudi Arabia were offered at the same tender.
The risk of lowering prices for complex fertilisers and phosphoric acid is increasing. In India, the tender for diammonium phosphate reduced sales prices. At the same time, in Brazil, price stability and the expected increase in demand are expected. Diammonium phosphate producers in China are also trying to keep prices down.
Nitrogen fertilisers are the most demanded in Latin America. Argentina was noted for buying urea from the Baltics at a price of 265 USD/t, FOB. While ammonium sulphate is not purchased by Latin American buyers, demand for ammonium saltpetre is also low.
News overview in the Ukrainian fertiliser market. Main events of the week:
- The Ukrainian government will hold a meeting on the future of the chemical industry
- Fertilizer duty from Russia is still in question
- Agroholdings buy NPK actively, at the same time there is no demand for nitrogen fertilisers
- Manufacturers are trying to wake up the urea market
Volodymyr Groysman ordered a meeting on the future of Ukraine’s chemical industry. This order was issued in response to an appeal from national deputy Lyovochkin.
In fact, for the third week in a row, the issue of introducing a special duty against Russian fertilizers has not been resolved. The draft decree exists, but the ministries and the Cabinet of Ministers of Ukraine do not comment on it. Let us remind you that this is a 5% special duty on all fertilizers and ammonia. Now there is a duty of 43% on nitrogen fertilizers from Russia, the total duty of 6.5% is added by 5%.
The Government does not comment on the issue of the embargo, but the fee is also questionable. The option with the duty is more profitable for the Cabinet of Ministers because it provides additional funds for taxes. With imports volume of 800-900 million USD from the Russian Federation, this is not less than 40 million USD.
Large agricultural producers are actively buying NPKs. Kernel has already bought the necessary volumes, in addition to which Astarta, Agroprosperis, Harvest and others are meeting their needs. Prices for NPK 10:26:26 increased by 250-300 UAH/t and will continue to rise, despite a fairly stable demand and a stable exchange rate of UAH. Growth is objectively necessary to accumulate funds for new purchases of goods with duties.
Dneprazot and Cherkasy Azot became the main urea suppliers in the Ukrainian market. They dominate the urea market and significantly affect the KAS market, both products are attractive in terms of price in relation to saltpetre. To stimulate demand, manufacturers will have to gradually raise prices, demonstrating growth in the global market.
Ammonia remains quite cheap, its price, when imported into Ukraine, is less than 8000 UAH/t, FCA, it makes it possible to make saltpetre extremely cheap, competitive in Ukraine. However, only part of the volumes in Ukraine makes saltpetre from ammonia. The price of imported saltpetre has risen to UAH 8000/t, and the Ukrainian product can still be purchased for UAH 7700-7900/t, CPT.
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.