In recent days, the price of urea has increased significantly, so that according to available statistics, the price of urea is now higher than its value in the last 13 years. The recent sharp rise in urea prices is due to several factors, the most important of which are the effects of Hurricane Ida on logistics and market supply, increased purchasing demand due to reduced coronavirus restrictions and thus increasing worldwide consumption, ban on phosphate exports, and phosphate fertilizers from China, as well as rising glyphosate prices.
On the other hand, the increase in gas prices in the European Union and the increase in the price of the first source of energy in China, coal, has had a significant impact on the production of fertilizers, including urea and phosphate fertilizers. The price of urea has risen from $ 350 per tonne in 2020 to about $ 760 per tonne. This increase means that we should have a significant increase in the global prices of strategic food products such as wheat, corn, Animal feed, and oily seeds because the cost of production of these will increase greatly as a result of rising fertilizer prices. This means that the cost of living will increase and will put economic pressure on the lower classes of society.
Russia currently produces about 8.2 million tons per year, Indonesia 6.8 million tons, India 6 million tons, Pakistan 5.9 million tons, Iran 5.6 million tons, and the United States 4.6 million tons, respectively. Since Russia and Iran are the world’s largest holders of gas resources and the cost of gas for these countries is much lower than importing countries, they make very good profits from the sale of urea.
In the phosphate market, China with 110 million tons, Morocco with 36 million tons, the United States with 23 million tons, Russia with 14 million tons, and Jordan with 10 million tons are the largest producers of phosphate ore. The price of phosphate ore as a raw material for phosphate fertilizers has a great impact on their prices. Phosphate ore prices have increased significantly since the beginning of 2021. Currently, the price of FOB phosphate in the term of FOB-Moroccan port of Casablanca has risen from $ 90 at the beginning of 2021 to about $ 130.
The increase in the price of agricultural fertilizers occurs after the recession caused by the worldwide coronavirus pandemic outbreak and the decrease in demand under the influence of global quarantines so that the return of demand to previous levels is the main driver of price increases.