News
24/03/25
Global fertilizer affordability drops to 2½-year low
London, 24 March (Argus) — Global fertilizer affordability has dropped to its
lowest in two and a half years, driven by firm phosphate and potash prices,
while crop values have dipped to the lowest since 2020. Nutrient affordability
fell to 0.82 points in March, the lowest since November 2022, Argus data show.
An affordability index — comprising a fertilizer and crop index — above one
indicates that fertilizers are more affordable compared with the base year set
in 2004. An index below one indicates lower nutrient affordability. The index
has dropped owing to higher fertilizer prices for phosphates and potash, which
were partly offset by a decline in urea prices. Crop prices have fallen for all
major grains and oilseeds on trade tensions. Phosphate prices were supported by
competing demand for limited supply. The absence of Chinese product from the
global phosphates market since late 2024 has kept supply tight. Additionally, a
lack of clarity surrounding China's return to the export market, while firm
sulphur and sulphuric acid costs force domestic DAP/MAP prices higher, has
prevented any softer sentiment in the region. Competition between India and
Ethiopia has driven DAP demand east of Suez. A significant decline in stocks in
India by the end of its high season forced buyers to remain in the market during
the off season. This coincided with Ethiopia switching to import DAP from NPS
from the third quarter of 2024, seeking over 1mn t of the product across regular
tenders. Re-emerging interest from Latin America, and with China still out of
the market, has allowed suppliers to raise MAP prices, while US DAP/MAP barge
prices are firming again ahead of spring applications. On potash, MOP prices
have been on the up this year, also driven by tight supply. Belarus' Belaruskali
began major works at its fourth mine in January, which will reduce exports of
white MOP by around 1mn t in the first half of 2025. In February, Uralkali
announced that it will undertake maintenance in the second quarter that will cut
its MOP output by around 300,000 t/yr, further cementing the stronger market
sentiment. It also said it will push more product — at least 400,000t of MOP —
to the domestic market in 2025. Canpotex also confirmed that it is fully
committed for the first half of this year, while uncertainty over tariffs on US
imports of Canadian imports also drove up sentiment. MOP prices have been
particularly low compared with other key nutrients, specifically phosphate and
nitrogen products. And expectations that MOP prices are likely to rise further
have encouraged buyers to step into the market earlier and for larger amounts
than normal as affordability remains healthy. Urea prices have fallen steadily
in March, after hitting 16-month highs in mid-February. The combination of a
delayed tender issuance from India, with expectations initially appearing in
early February, and the restart of Iranian urea production this month — after
outages since December — have weighed on sentiment following a price rise since
early December. The lack of a tender in India has enabled US importers to build
the line-up for the spring season, releasing pressure on buyers for
March-loading cargoes. And a lack of spot import interest in urea from
Australia, which appeared earlier than usual in the first quarter of last year,
has yet to tighten the balance significantly east of Suez. On the other hand,
crop prices for corn, wheat, rice and soybeans have fallen sharply in March,
with the crop index — which includes global prices adjusted by output volumes —
dropping to the lowest since August 2020 partly on uncertainty over trade
dynamics following the imposition of trade tariffs. There is a risk that
declining grain prices will weigh on demand for crop inputs. By Lili Minton, Tom
Hampson, Julia Campbell and Harry Minihan Global fertilizer affordability Index
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