Market Morsel: Fertilizer prices falling!
Market Morsel
It’s time to start thinking about inputs for the coming season. The last couple of years has been really interesting, going from low pricing levels in early 2020, to reaching nominal highs last year.
The good news is that pricing levels are falling globally.
The major driver of agricultural inputs is the cost of energy, especially natural gas. The price of natural gas has been at extreme levels during the past two years, especially since the Russian invasion of Ukraine commenced.
The feedstock of synthetic fertilizer is energy. The chart below shows the price of natural gas alongside the price of urea. Generally, the two follow a similar trend.
In recent months gas prices have fallen from recent highs as Europe, luckily for them, has so far had a relatively mild winter.
The price of urea in the middle east has come under considerable pressure, dropping to A$645/mt on average for the month.
This is great news for Australian producers, as this time last year it was A$1090. The big question now is whether this fall in price will be passed on to producers.
Whilst there is limited transparency in Australian fertilizer pricing, we invite you to fill in our fertilizer census whenever you get a quote.
Find out about the census by clicking here
