Rabobank sees deteriorating trend in price of fertilisers

India Infoline News Service | Mumbai |

For urea, there could be a limited upside originating from Ukraine if market sentiment is impacted by a rationed supply from the country.

There is a deteriorating trend in the price of fertilisers and Rabobank expects this to continue in the coming quarter. China has exported significant volumes in its high tax season, and phosphate and urea prices will feel downward pressure as China exports even more in its low tax season. Fertiliser prices in the US will be under downward price pressure from fading demand; prices in Q1 were elevated due to supply chain bottlenecks and a compressed application window. For urea, there could be a limited upside originating from Ukraine if market sentiment is impacted by a rationed supply from the country.

Regional Outlooks

United States: Increased side-dressing demand and supply chain filling ahead of the autumn application will not be enough to provide significant upside to global fertiliser prices in Q2. While demand could induce producers to direct volumes to the domestic market, impact on exports is likely to be limited.
 
EU: Nitrate and urea prices have found price support in recent weeks due to supply bottlenecks and early demand, but as demand enters its lull season, prices are set for downward correction.

Brazil: Even out of season, Brazil has a role to play in the global fertiliser arena. Potash producers are keen to secure volumes in the country. Higher prices in Brazil are supported by the expectation of ongoing depreciation of the Brazilian Real and high demand coming from farmers incentivised to increase yields

India: Indian demand remains under pressure with the Ministry of Chemicals and  Fertilisers struggling to pay out subsidies. A potentially weakening Rupee and disappointing monsoons could impact fertiliser demand further.

China: With the domestic application season mostly finished in China, the demand for phosphates and potassium fertilisers is weakening going into Q2. An upside in prices appears limited, despite the export window opening in mid-May for phosphates and in July for urea.

Ukraine: The future of Ukrainian production remains uncertain, as potentially increased gas prices, political instability and especially lower world prices could force the country to halt production. To date, the impact mainly been felt in the already tight ammonia markets.
 

Advertisements

  • Save upto Rs.2.67 lakh with Pradhan Mantri Awas Yojana ...Know more
  • Now Save Rs.3150 on your Demat Account ...Click here
  • Now get IIFL Personal Loan in just 8* hours...APPLY NOW!
  • Get the most detailed result analysis on the web - Real Fast!
  • Actionable & Award-Winning Research on 500 Listed Indian Companies.