Ukraine imposes an embargo on fertilizer imports from Russia. Urea prices rise in the world and ammonia becomes cheaper.

Our news, Overview of the market for mineral fertilizers
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Commodity online exchange Kyiv Mercantile Exchange – KME: the results of May 15-23, 2019 in the markets of mineral fertilisers in Ukraine and the world.

News overview in the world fertiliser market. Main events of the week:
  • Urea becomes more expensive in North Africa and the Baltics
  • Ammonia, unlike nitrogen fertilizer, is becoming cheaper
  • Individual types of phosphate fertilizers become cheaper

The decrease in prices for phosphate fertilizers and ammonia contrasted with the rise in the price of urea and saltpetre. Most experts rightly expect urea to become cheaper, followed by other nitrogen fertilizers. In summer, goods are always produced in excess, so traders try to play as profitable as possible on the current situation, by selling the goods more expensive for June.

Urea sales in the Black Sea were carried out at prices of 250-255  USD/t, FOB. This is a Russian product. At the same time, in Turkey, the price for the end consumer increased to 275 USD/t with a 180-day grace period. Traders skillfully keep the market at a high level, covering spot needs with high prices. In North Africa, urea reached a price of 272 USD/t, FOB. Algerian goods are already offered at a price of 280 USD/t, FOB.

In fact, for the first half of June, all available urea volumes were offered for 280 USD/t, FOB-Middle East.

The price of ammonia decreased to 220 USD/t, FOB-South. This is too low level for trade, which is causing demand growth among buyers, especially in Turkey and Southern Europe. Free volumes of Togliatti ammonia were purchased by Turkish buyers Petkim and Eti Bakir at a price of 215 USD/t, FOB.

In Europe, the price of saltpetre is only 10 USD/t below the price of urea, spot sales from Yara were at 257 EUR/t, with delivery.

However, the phosphate market shows a decline in almost all markets. This is primarily diammonium phosphate, the price of which reached 375 USD/t, CFR-India. Chinese DAP suppliers also reduced the price to 360-367 USD/t, FOB. In Russia, export prices did not change.

News overview in the Ukrainian fertiliser market. Main events of the week:
  • Ukraine imposes an embargo on the import of fertilizers from Russia
  • Ukrainian plants will start producing saltpetre from Russian ammonia
  • CPI 16:16:16 prices slightly decreased, which did not affect demand
  • A Plant Nutrition Forum was held in Turkey

The Ukrainian government has included fertilizers in the list of goods subject to import bans (embargoes). This caused a wave of indignation among traders, but did not affect the overall situation, because the decision was made at a time when the whole country was discussing the inauguration of the new president. To cancel the decision, a new parliament must be elected.

The decision will come into force on July, 1 and will be valid until the end of the current year. This will affect the distribution of the Ukrainian market, strengthening the role of Sumykhimprom. But the plant itself can produce no more than 200 thousand tons of complex fertilizers by the end of the year, which is 5 times less than the demand. Since June, the Belarusian products are expected to rise in price.

All Ukrainian saltpetre producers in the summer months will be loaded with saltpetre from imported ammonia. This raw material from Russia is 30-50% more profitable than gas raw materials offered by Naftogaz.

With the liquidation of Ukraine’s NERC, the electricity and gas market is no longer regulated and the main prices for all consumers are dictated only by the monopoly – “Naftogaz”.

In May, 16:16:16:16 SPC in Ukraine cheapened up to 12200 UAH/t. CPT. These prices were not final, and even if the embargo was imposed on Russian fertilisers, the prices of NPK in Ukraine would not rise speculatively.

It should be noted that the spring season for nitrophos is over, and the summer season has become more competitive on the part of Ukrainian products. In fact, the traders are put into narrow limits and have to stock up on NPK without any sales, expecting a deficit.

The second agrochemical forum was held in Turkey. This year it was dedicated not only to mineral fertilizers, but also to fertilizers for organic production. Therefore, the Forum on Plant Nutrition gathered 85 delegates from three countries of the Black Sea basin and was held under the auspices of increasing the attention of traders to service, and producers – to new products. Participants of the forum, which was organized by IA InfoIndustry, held meetings with Turkish producers of special fertilizers. The forum ended with an excursion to the Turkish Fertilizer Plant.

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 March 2019, the total turnover of trades in Kyiv Mercantile Exchange exceeded UAH 4.5 billion.

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