As a result of China’s ban on exports, phosphate ore prices have risen sharply. The Chinese government recently passed a law banning the export of phosphate ore and most phosphate fertilizers from 2022.
With the passage of this law last week, the price of DAP reached about $ 700 and MAP about $ 780.
Globally, China is not recognized as a major exporter of phosphate, but it has an undeniable role in the phosphate fertilizer market. With China’s exit from the phosphate fertilizer market, competitors’ demand for phosphate to fill the gap, will increase. Due to the volume of Chinese exports, this increase in demand will be large and significant, so this will increase the price of phosphate.
On the other hand, according to the information we obtained, the Egyptian government intends to increase its investment in the development of phosphate fertilizer plants and to cut off phosphate ore exports over time. The huge price difference between phosphate ore ($ 62-58) and phosphate fertilizers ($ 700-700) is the main incentive for the Egyptian government to do this.
Egypt exported 1.2 million tonnes of phosphate ore to Europe and East Asia last year. The country plans to increase exports to 3.5 million tonnes by 2021. However, according to our information, this increase in production will only last until the investments reach their goal.
