Food Shortage and Rising Energy Cost Rings an Alarming Bell for US Nitrogen Prices
- 24-Nov-2022 3:41 PM
- Journalist: Francis Stokes
Texas- In the US, Nitrogen prices continued to increase on account of escalating energy prices. Furthermore, the demand for fertilizers has also increased slightly, raising the need for Nitrogen in the US market. According to US government authorities, fertilizer cost has increased by 10% compared to last year's data. The United States' imports and production of fertilizers are reliant on it. The cost-increasing factors include the restricted supply of the necessary minerals and high energy prices, a rise in global demand and the cost of agricultural commodities, dependence on imported fertilizer, and a lack of competition in the fertilizer sector. Towards the mid-Q4 of 2022, Nitrogen prices ranged between USD 735 to 800 per MT in the US.
The inflation rate in the country has started to ease, yet the effects are yet to be shown. However, another factor that might continue to impact the market prices of Nitrogen is the food shortage. The significant firms had reduced production due to exorbitant natural gas prices; fertilizer supplies are becoming scarcer. Resuming the operational rate and fulfilling the demand may still take time in the country. As the cost of essential crop input increases, farmers worldwide will probably reduce the amount of Nitrogen fertilizer they apply. Nitrogen prices rose past quarter and are following the same northward momentum.
The European Union, which provides 15% of the world's finished Nitrogen fertilizer products, is drastically reducing production, and about half of the EU production capacity is currently idle. Consequently, the demand for Nitrogen and its derivatives has increased in the US market leading to price increments. As per ChemAnalyst, the prices of Nitrogen are expected to follow the upward trend in the country as sudden changes in the economy will take to implement and show its impact on Nitrogen prices in the US market.