Quarterly Update on Global Water Soluble Fertilizers (WSF) Market
For the Quarter Ending June 2021
Prices of most of the fertilizers showcased an upward rally during this quarter in USA, backed by firm demand fundamentals. Water soluble fertilizers including Mono Ammonium Phosphate (MAP), Potassium Nitrate and Urea Phosphate remained high throughout the quarter due to firm demand and rising upstream cost in the country. Moreover, the demand for crops like corn and soyabean was already very high from other downstream sectors, which also induced the demand for fertilizers in the meantime. In addition, delayed crop season due to winter devastation also exacerbated the overall demand scenario and led to a significant rise in price of all the fertilizers in USA. Therefore, prices of MAP rose effectively and reached near USD 675/MT in USA in June.
Asian market witnessed firm sentiments for water soluble fertilizers during this quarter. In China, major manufacturers received significant enquiries for the product from Bangladesh, while the availability was not enough to satisfy the overall demand. Meanwhile, rising production cost of DAP, MAP and other fertilizers was leading Chinese manufacturers to ask the respective government authorities to increase their MRP on these fertilizers. Therefore, a steep rise in prices of WSF was observed across Asia. Meanwhile, India also encountered a similar scenario, where the domestic exports were very high compared to the domestic demand of the country, which led to an overall increment on the prices of these fertilizers during this timeframe.
Europe experienced huge demand for water-based fertilizers across the region during this quarter, backed by seasonal rise. The demand for water-based fertilizers including DAP, MAP and Urea Phosphate remained, while the prices shot up effectively due to expensive upstream chemicals from other countries like USA. In the meantime, demand from the global market remained high including USA, where due to the domestic shortage of fertilizers buyers were seeking cargoes from Europe and Asia. However, European buyers also seemed cheaper imports from APAC region during this timeframe.
For the Quarter Ending March 2021
In North America, the demand for Water soluble fertilizers remained similar to Q4 2020, amid curtailed agricultural activities. Availability of several feedstocks remained low, as several plants remained idled due to freezing fallout across gulf area. Like several Nitrogen and Ammonia plants in USA had to face force majeure under extreme weather conditions, which halted the production of WSF in the country. The prices for Water soluble fertilizers like DAP (Di-Ammonium Phosphate) and Urea rose affectively, average DAP price was settled at USD 576.7/MT during March.
The Asian market witnessed moderate to low demand for Water soluble fertilizers but significantly high demand from overseas boosted the exports. Most of the export demand was heard coming from Europe, after the arrival of spring season. In the Chinese market, sudden surge in Covid-19 cases forced the government imposed partial lockdown which halted the supply activity in the country, although lockdown didn’t affect the overall agricultural production of the country. In the Indian market, DAP encountered a sudden surge of 58.33% in prices amidst strong domestic demand, which was later countered by government initiatives to provide relief to farmers of the country.
The European countries experienced higher demand for Water soluble fertilizers from the agriculture sector, after arrival of spring season. The regional supply remained pressured, as the imports of key raw materials reduced from the USA due to freezing winter snap. Meanwhile, traders were looking forward to import from several Asian countries, but that too sound expensive to many due to high freight and container cost across the Asia-Europe trade route which significantly affected the prices of Water-Soluble fertilizers in the region.
For the Quarter Ending September 2020
The Asian fertilizer sector reported strong performance during Q4 2020 led by higher sales volume. The region witnessed abrupt spike in the prices of WSF as the key raw materials- ammonia, phosphate, potash etc. firmed due to global shortage. In India, stocks for NPK remained pressured as the key fertilizer exporter from Russia awaited final decision from the Indian government as buyers were waiting for clarifications regarding the increase in fertilizer subsidy or MRP before making any further purchases. Reduced inventory levels and strong farmer’s appetite across the Indian subcontinent pushed up the WSF offers across the Indian markets. Prices spiked for almost all important WSF products as traders actively procured for the peak October-November months for the winter rabi season.
The Americans reported strong pull from the fertilizers segment due to a robust growth in demand despite the economic downturn due to surging COVID-19 cases. Geared up agricultural practices in Canada prompted the sectoral growth. The US fertilizer producers reported volume growth in their quarterly sales of Water Soluble Fertilizers and firmed margins. Increase in the plantation of soil samplings in the US which were recorded higher by about 24% during Q4 encouraged higher sales. WSF applications picked up in the Southern Plains, such as Oklahoma, in November as cooler weather subsided while much of Texas remained warmer and drier than expected. Supply remained tight as several Russian exporters held back their volumes to meet the domestic demand. Highly priced Nitrogen and Phosphates triggered a quick rise in the WSF prices across the US towards the end of the quarter, prompting customers to make advance payments for retail purchases. Nitrogenous water Soluble Fertilizers showed sharp rise as Urea rates were also seen surging over Q3 levels against the backdrop of soaring gas price in Nov-Dec period.
The European markets were favorable for fertilizer producers throughout the fourth quarter. Towards the closing of 2021, the prices of some Water Soluble Fertilizers showed marked year-on-year growth due to high consumption by end consumers. A leading Russian fertilizer producer reported robust company sales and high margins despite lack of exports to US and some Asian countries. For December offers, prices for most of the fertilizer products were maintained at high levels as the key feedstocks which had remained at lows throughout 2020 started gaining momentum towards the end of Q4 due to recovering demand and production constraints due to the winter season. Ammonia FOB Baltic price which had touched USD 211 per tonne during the fourth quarter supported the WSF price growth.