Urea Phosphate prices on hike due to increased price of natural gas

Water-soluble fertilizer, Urea Phosphate has been endlessly rising due to a steep rise in the prices of natural gas. As per ChemAnalyst data, the prices of Urea phosphate were observed at USD 981.84 per MT in March with an upsurge of 9.49% from last month’s price, i.e., 896.75 per MT. Russia is the world’s largest exporter of fertilizers and the world’s second-largest producer of Natural gas. Fertilizers constitute a significant share in the growth of agricultural commodities and crops across the world and a substantial share of input cost. Urea phosphate is an excellent source of useful Nitrogen and Phosphorus and is used in agriculture to fertilize a wide variety of soils and horticultural crops.

Demand for fertilizers increased in the agricultural sector, due to supply and demand-side factors during rabi cropping season, i.e., October - March, a peak season for plantation of winter sown crops like Wheat. The price of Urea Phosphate increased in India mainly due to the Russia-Ukraine crisis impacting the world economy. The ongoing tension over the Black Sea halted the supply of fertilizers. High freight charges and low production rates are some of the contributing factors to the price increase. In India, a steep rise in the Import of Energy is estimated to affect almost every sector of the economy. If the war continues, it will worsen the availability of fertilizers during the cropping season which will result in the low productivity of rice, soybean and other crops.

As per ChemAnalyst, Urea Phosphate price in India is expected to rise in the upcoming weeks as the value of feedstock Natural gas is unlikely to increase until the ongoing war between Russia and Ukraine resolves. On the other hand, demand for fertilizers will be reduced by the end of the cropping season.