Urea: The price to rise.

Fertilizer Updates

On a monthly basis, or more often, EP3 cover fertilizer with a specific focus on the Australian market. We have been doing this for quite some time, and we do this independently. We are not funded in any way by the fertilizer industry.

In these articles, we will generally cover the supply and price for urea. In this article, I’ll cover the price situation in Australia.

Pricing Situation

The fertilizer price in Australia is not transparent, as we see with commodity pricing throughout the rest of agriculture.

So what we do is provide a model that is used to show the trend for a national price for urea within Australia?

The pricing for urea, landed in Australia, has increased over the past three months. The expected landed price for September was in the range A$650-680.

It is important to note that this doesn’t take into account the cost of merchandising, administration costs etc. It does provide a good reflection of the landed price.

The second chart shows the modelled price against the average price that fertilizer importers paid to land in Australia.

We can see that the relationship between our model and the actual imported price is highly accurate. This means we can use this model to indicate what urea pricing will do in Australia.

The majority of pricing of urea on a global level is attributed to energy costs; as natural gas prices, we will see urea pricing increase.

One of the biggest drivers of energy markets at the moment is the potential for a larger conflict in the Middle East, which brings in neighbouring countries, especially Iran, which we wrote about last monday.