Drought in Russia: Grain region particularly affected
In Russia, the main region for grain cultivation has been experiencing dry conditions for weeks. This is likely to result in lower yields and poorer quality than previously expected.
The Fertilizer Prices
The fertilizer prices are barely moving. Manufacturers and dealers are holding back on price quotations. However, gas prices have fallen, reducing the production costs for European manufacturers. At the same time, the introduction of sanctions on Russian fertilizers could drive prices significantly higher.
Demand from Agriculture
The demand from agriculture is weak. Grain prices fell below 200 euros in early May. Despite the almost completed restocking of dealers, there are few sales and price quotations for the new campaign. Some producers are apparently waiting for an official announcement from the EU Commission regarding the sanctioning of Russian fertilizer imports. This could help keep fertilizer prices at high levels despite weak demand and a sharp decline in grain prices.
Continued Negotiations on Fertilizer Prices
Negotiations between manufacturers and dealers on prices for the new season are still ongoing. According to fertilizer dealers, there are two opposing views: on one hand, producers - especially European ones - expect limited supply due to the sanctioning of Russian deliveries. On the other hand, dealers see that farmers' buying interest remains low due to low grain prices and high nitrogen costs. Dealers who still have quantities want to avoid the risk of being left with stocks just before the start of the new campaign.
Spot Market Prices
At the end of the month, fertilizer prices on the spot markets in Germany for most nitrogen fertilizers remained unchanged. At the German import harbors, spot market prices for urea were at 495 euros per ton this week. These are the same prices as the previous week, but 11 euros less than at the beginning of April and about 40 euros less than at the end of March. Prices for calcium ammonium nitrate (CAN) also remained unchanged this week at 360 euros per ton at import harbors and wholesale locations.
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