• Researchers at Ben-Gurion University of the Negev say they have conducted a pilot study that showed that raw human excrement can potentially be converted to a safe, reusable fuel and a nutrient-rich fertilizer.

  • Diversified chemicals group Omnia says its innovative nitrophosphate plant under construction in Sasolburg will materially improve the company’s overall competitiveness in the production of fertilisers, despite an upward revision to the project’s capital cost.

  • The soil is made up of air, water, decayed plant residue, organic matter, and minerals, such as sand, silt, and clay.

  •  

     

    Limited activity on the fertilizer markets with MAP being the main mover upwards, while Urea and Potash remain mostly stable.

     

     

     

    19 May price (ex-WH)

    12 May price (ex-WH)

    Week-on-week change

    Urea gran

    R12,912

    R12,858

    0.4%

    MAP

    R18,735

    R18,488

    1.3%

    KCl gran

    R18,770

    R19,093

    -1.7%

     

    Cost per kilogram of nutrient (R/kg):

     

    19 May

    12 May

    Week-on-week change

    Nitrogen (N)

    R28.07

    R27.95

    0.4%

    Phosphate (P)

    R68.93

    R67.90

    1.5%

    Potash (K)

    R37.54

    R38.19

    -1.7%

     

     

    Nitrogen

    The urea market was generally down this week, with the one exception being the Middle East urea benchmark that our price is based on. India concluded its urea tender at the lowest prices received and booked more than 1.6 million tons.


    Most urea markets were slightly down this week but very small price drops that ranged from about $10/t in North America to around $40/t in Brazil. A deal was done for a urea cargo to Southern Africa at a premium to last week’s prices which bumped the Middle Eastern benchmark price up. A factor pushing prices down is the export cargoes of urea from China (230,000t) and Russia (60,000t) booked in the past week that weren’t really factored in. There remains very little demand for urea currently so expectations are that the urea price will continue to drift sideways with the odd small downward adjustment.

    Many urea producers were pinning their hopes on US demand emerging for top dressing but the US plantings thus far have been well behind historical averages as wet fields delay farming activities. High levels of soil moisture are delaying the planting of most row crops, not just maize.

    Ammonium nitrate and sulphate markets also experienced moderate price declines this week. The seasonal lack of demand and increasing availability out of China are keeping amsul under pressure.  Ammonium nitrate is seeing the emergence of a two tier market with Russia AN trading at a substantial discount to those countries prepared to trade with it. In Europe demand for AN/CAN remains fairly weak although some producers are trying to push through small price increases. In general European AN prices are also trending downwards in keeping with urea and amsul.

    The ammonia market continues to experience a bearish sentiment with very little buying interest and only a handful of deals taking place this week. The US spring direct application ammonia season has been very poor because of excessive moisture making conditions unfavourable for ammonia. Further big downward adjustments are expected for some of the contract benchmark prices such as Tampa in the coming weeks.

    On the local front, some urea cargoes have arrived in Durban and navigated their way through the port delays and flood-damaged infrastructure. At least one cargo from Iran has been discharged and this product is priced below the Middle East equivalent, so buyers prepared to accept Iranian product have been able to access product and enjoy the lowest prices seen in 6 months or more.

     

    Phosphates

    Phosphate markets were broadly steady this week, although the Middle Eastern MAP price did see a moderate increase. Global demand remains depressed due to high prices and some cargoes from Russia continue to be sold to countries friendly to it.


    Bangladesh concluded a large 1 million ton tender for a range of phosphate products this week. Pakistan purchased a DAP cargo from Saudi Arabia and the Indians bought a number of phosphate cargoes from Russia at its new target price. These Asian buyers provided impetus to the Middle Eastern price benchmark.

    In the Western markets, demand remained very limited with a wide range of prices being mentioned. The wide price range points to buyers and sellers having very different ideas of what they’re prepared to accept and of course the prospect of many deals being concluded is small.

    Chinese phosphate production is reported to be operating at high rates and inventories are rising as the local season has largely finished. The Chinese government have not shown any signs yet of opening phosphate exports but the market remains hopeful that exports should resume by June or July at the latest.

     

    Potash

    Brazil saw a small price drop on potash but the landed price of potash into Southern Africa remains unchanged for the 7th week running. 


    Buyer resistance to potash prices and the steady flow of Russian potash cargoes to Brazil are behind the price decrease seen in that market. The potash market generally remains quiet as is normal for this time of year. No massive downwards adjustments are anticipated while Belarus remains completely absent from the market and Russia exports are subject to sanctions in many markets.

    There is also a view that any meaningful decrease in prices could unleash a lot of pent-up demand and a sudden increase in buying activity could just push prices back up again.

    There was a sign of a supply response to current prices with BHP announcing this week that its 4 million t/y potash project in Canada would be accelerated by one year. As the project is only expected online around 2026, this will do nothing to help potash supply in the short to medium term.

     

    General Market Outlook 

    Demand keeps crude oil prices moving upwards, while natural gas prices stabilise this week.

    Crude oil carried on with its volatile behaviour this week as prices seem to be on the upward trend again. Brent Crude touched on $114/bbl earlier this week and is trading at $111.5/bbl currently, which is up on the $109/bbl a week ago. US and European gas prices have declined this week as the gas markets seem to be more stable. Henry Hub prices in the US are sitting at $8/MMBtu and the TTF price in Europe remains at $29/MMBtu.  

    Maize prices softened slightly this week both on the international and local fronts but the price declines were very small. Soya on the other hand made some meaningful gains on the CME although the Safex soya prices were down week-on-week. Sunflower was the main gainer on Safex with prices up around 4% this week.

    The rand recovered around 1.7% against the dollar this week, which helped offset the small gains in the international prices of nutrients.


    Latest Direct Hedge quotes for urea and MAP swaps in USD:

     

     

    Arab Gulf
    18 May 2022

    Arab Gulf
    12 May 2022

    Week-on-week change

     

    Bid

    Ask

    Bid

    Ask

    Bid

    Ask

     

     

     

     

     

     

     

    Jun-22

    700

    720

    680

    730

    +20

    -10

     

    Q3-22

    700

    750

    680

    730

    +20

    +20

     

     

    Jul-22

    700

    720

    -

    -

    -

    -

     

     

    MAP Brazil CFR
    18 May 2022

    MAP Brazil CFR
    12 May 2022

    Week-on-week change

     

    Bid

    Ask

    Bid

    Ask

    Bid

    Ask

     

     

     

     

     

     

     

    Jun-22

    1,050

    1,100

    1,000

    1,100

    +50

    -

     

    Jul-22

    1,100

    1,200

    -

    -

    -

    -

     

     

     

    This week saw the urea Swaps spread narrowing markedly, presuming due to the establishing of the Indian urea tender price and the expectation that this will form a benchmark for the next month or two. The physical urea market appears to have some downward momentum to below $700/t so it will be interesting to see how the spot prices and forward prices interact.

    The MAP Brazil Swaps had an upward adjustment for June and the first July prints were published. The July quotes indicate an expectation from the market that MAP prices will firm in Brazil as we go into Q3. This is in line with the usual seasonal trends, although considering the buyer resistance to current prices and the probable resumption of Chinese phosphate exports in Q3, it is not that obvious that such an MAP price will gain traction.

    If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.

     

    Andrew Prince 


    This email address is being protected from spambots. You need JavaScript enabled to view it.

     

     

  • High crop yields often come under scrutiny because of the fertilizer levels needed to produce such yields and because of the perception and reality of the potential environmental impacts of those inputs.

  • Nitrogen pollution is produced by a number of interlinked compounds, from ammonia to nitrous oxide. While they have both natural and human sources, the latter increased dramatically over the past century as farmers scaled up food production in response to population growth. Once these chemicals are released into the air and water, they contribute to problems that include climate change and “dead zones” in rivers, lakes and coastal areas.

  • South Africa's farmers compete in a global village and have to use the latest technology to ensure that decision-making is as effective as possible. Technology also has an important role to play in empowering small-scale farmers to make their businesses more viable. 

  • Nitrogen and phosphates drift downwards as Rand strength helps push local prices down.

     

     

     

    26 May price (ex-WH)

    19 May price (ex-WH)

    Week-on-week change

    Urea gran

    R12,602

    R12,912

    -2.4%

    MAP

    R18,429

    R18,735

    -1.6%

    KCl gran

    R18,626

    R18,770

    -0.8%

     

    Cost per kilogram of nutrient (R/kg):

     

    26 May

    19 May

    Week-on-week change

    Nitrogen (N)

    R27.40

    R28.07

    -2.4%

    Phosphate (P)

    R67.91

    R68.93

    -1.5%

    Potash (K)

    R37.25

    R37.54

    -0.8%

      

    Nitrogen

    Urea from Iran and Russia is putting downward pressure on prices, as buying interest remains quiet. The ammonia price took a big step down this week as the US Tampa contract price dropped almost 40%.


    Markets that are happy to trade with Russia and Iran are enjoying competitive offers for urea, as Brazil and US urea prices continue to drift downwards. The Middle Eastern urea producers are busy fulfilling their tender commitments to India but are facing much lower netback values for any new business as most major price benchmarks are well below the $690/t fob value that the Indian tender price represents. US nitrogen demand continues to be hampered by wet weather conditions for planting and some of the northern states are starting to switch from maize to soya, which will further hurt nitrogen demand.

    It looks like the usual Q2 seasonal lull for urea demand is set to continue for at least another month, unless some unexpected demand emerges.

    The ammonium nitrate and ammonium sulphate markets were also quiet this week, with prices broadly going sideways and the market sentiment pointing towards prices continuing to trend downwards. The main annual industry conference, IFA, is taking place next week, so there is hope that some signs of market direction will emerge from discussions taking place there.

    Ammonia saw some large downward price corrections this week as the US Tampa contract price dropped $425/t to $1,000/t CFR and the Middle East ammonia price benchmark dropped around $100/t too. This will be welcome relief for the local South African fertilizer producers that consume ammonia to produce MAP, CAN and NPKs. An ammonia import cargo was booked from Algeria sailing to South Africa, which may be a first from this origin.

     

    Phosphates

    The market sentiment for phosphates prices continues to be quite negative/downward but players are waiting to see whether India’s attempt to force prices down towards the $900/t mark is successful. Demand destruction remains a common theme as buyers reduce their purchasing volumes.


    Most MAP/DAP prices around the world continue to float in the $1000-1100/t range. There is a lot of noise around prices in various regional markets – with the Chinese domestic price a good $300/t or more below international prices but the Chinese government is maintaining strict restrictions on any export sales. Brazil is being offered discounted Russian phosphates, while the Moroccans continue to demand a big premium for their phosphates.

    The phosphoric acid quarterly contract price remains unresolved and it looks unlikely that a price consensus for this quarter will be reached, considering there is only one month left. The Moroccans are standing by their position of $2000/t while Indian officials are announcing that they will not pay anything above the Q1 price of $1530/t. Interestingly, some of the smaller phos acid exporters to India like Jordan have rolled over the Q1 price and have been selling to India at that level.

    It appears that Foskor has agreed to another large phos acid export to Bangladesh during the past week or so, which has angered a number of the local liquid fertilizer producers who are concerned about getting adequate phos acid supplies ahead of the liquid season. Foskor is reported to be running fairly well otherwise, although MAP availability remains incredibly limited in the South African market.

     

    Potash

    A very quiet week for potash as prices rolled over and no price changes are expected any time soon. 


    Potash market players are apparently waiting for next week’s IFA conference to thrash out potash prices. Emerging trade data from Brazil points to over 500,000t of Russian product destined for that market, which represents almost half of Brazil’s May requirement. This is a larger volume than most market analysts anticipated being possible out of Russia. Russia historically has supplied 10-15% of Brazil’s potash imports at this time of year.

    This may all point to downwards price pressure, until more potash supply emerges, prices are not likely to change.

    Asian markets have been struggling to source their full needs and trade data for the year to date is indicating that Asian buying is 15-20% lower than the same period in 2021. Not only is this a sizable reduction to potash consumption but is a major concern for crop yields and thus food security.

     

    General Market Outlook 

    Brent crude oil price remains very strong this week, as some recovery in the Rand gives relief on local commodity prices.

    Crude oil had a very bullish week with the price rising steadily from $111/bbl to touch above $117/bbl by Thursday. In early trading this morning prices appeared to drop a little but oil prices remain very elevated. On the natural gas front, the US Henry Hub price leapt from $8/MMBtu to go above $9.5/MMBtu as June options expired on Thursday and some players had to scramble to get cover. European gas prices dropped to $26/MMBtu earlier in the week before moving up to $28/MMBtu currently.  

    Maize prices declined on the international front over the past week, and the stronger rand exacerbated the drop in Safex prices for both white and yellow maize of over 4%. Local soya and sunflower prices bucked the maize trend, overcoming weaker CME prices and the stronger rand to gain around 2% over the week.

    The rand strengthened against the dollar for the second week running, gaining just under 1%.

    Latest Direct Hedge quotes for urea and MAP swaps in USD:

     

     

    Arab Gulf
    27 May 2022

    Arab Gulf
    20 May 2022

    Week-on-week change

     

    Bid

    Ask

    Bid

    Ask

    Bid

    Ask

     

     

     

     

     

     

     

    Jun-22

    680

    720

    700

    720

    -20

    -

     

    Q3-22

    680

    720

    700

    750

    -20

    -30

     

     

    Jul-22

    680

    720

    700

    720

    -20

    -

     

     

    MAP Brazil CFR
    27 May 2022

    MAP Brazil CFR
    20 May 2022

    Week-on-week change

     

    Bid

    Ask

    Bid

    Ask

    Bid

    Ask

     

     

     

     

     

     

     

    Jun-22

    1,050

    1,100

    1,050

    1,100

    -

    -

     

    Jul-22

    1,100

    1,200

    1,100

    1,200

    -

    -

     

     

     

    As we speculated might be possible last week, the urea Swaps price softened slightly to align with the physical urea market. A question that could be asked is why the forward urea price did not decline more considering the negative sentiment in the market around urea prices. We probably need to see increased trading volumes to make any predictions around the urea price direction – currently, trading volumes are so limited that it’s difficult to draw robust conclusions about where urea prices will be in the next month or two.

    There was no change on the Brazil MAP forward prices this week, as the MAP market remains subdued and most market participants are waiting for the IFA conference next week to get some pricing signals.

    If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.

    Andrew Prince 


    This email address is being protected from spambots. You need JavaScript enabled to view it.


  • One way to improve profitability, is to reduce input costs. When it comes to maize, one of those inputs – and a particularly significant one at that – is nitrogen fertiliser. But how much could you save if your maize, like legumes, could fix its own nitrogen?

  • If you started your day wearing clothing made of cotton, eating multigrain cereal doused with milk or filling your vehicle's tank with an ethanol blend, you may want to thank a farmer.

  • An average of 40% of the nitrogen fertiliser applied to crops isn’t utilised and could be lost. However, by making small changes to fertiliser use, farmers can reduce these losses and boost margins.

  •  

    Another week of falling fertilizer prices, with only Potash showing some stability.

     

     

     

    9 June price (ex-WH)

    2 June price (ex-WH)

    Week-on-week change

    Urea gran

    R11,695

    R12,007

    -3.3%

    MAP

    R17,252

    R17,399

    -0.8%

    KCl gran

    R18,399

    R18,352

    0.3%

     

    Cost per kilogram of nutrient (R/kg):

     

    9 June

    2 June

    Week-on-week change

    Nitrogen (N)

    R25.42

    R26.30

    -3.3%

    Phosphate (P)

    R63.68

    R63.90

    -0.3%

    Potash (K)

    R36.80

    R36.70

    0.3%

     

     

    Nitrogen

    The price downturn has set in solidly on the urea market as all major price benchmarks saw reductions this week. Urea sellers were increasingly aggressive in offering discounts to generate sales volumes. The urea market looks long for the next 4-6 weeks and further price decreases are expected.


    Substantial volumes of urea being offered in Brazil and the USA saw prices sliding as producers and traders recognize that they are unlikely to find buyers in the next month if they delay. Producers are also cognizant of their rising inventory levels and the next meaningful tender volumes are only likely to emerge in the 2nd half of July from India. There is also a growing prospect of Chinese urea exports resuming in earnest in July, which will further exacerbate the oversupply situation.

    Ammonium nitrate and ammonium sulphate prices got caught in urea’s slipstream and saw large drops this week. This decline was overdue as urea has fallen more substantially than either of these products in the past month. With demand from the Northern Hemisphere now over, ammonium sulphate saw a drop of 8-10% across the various price benchmarks.

    While the ammonia market didn’t show much actual reduction in price, the message from all markets was the same – there is no demand right now. Supply from most sources remains strong and the outlook is thus for further price declines.

    The import parity costing of urea yielded another decent step down, falling around R500/t on the week, despite the rand weakening slightly. It looks like the price slide will continue for at least a few weeks more, which is good news for local urea buyers.

     

    Phosphates

    The biggest news this week for phosphates was the emergence of Chinese exports with 1.2 million tons being offered on the Bangladesh tender. Phosphate prices around the world kept up their recent trend of moderate weakness, with small price drops being seen.


    Trade data for US phosphate imports are showing the extent of demand destruction in that market, with year to date figures showing a 66% drop in imports. The US is expected to import 1 million tons less of phosphates in the 1st half of 2022 versus the same period in 2021. This does present an upside scenario later in the year if the Americans return to the market aggressively to make up this shortfall, which could easily send phosphate prices racing back up again. Of course, the key question until then will be what is the world supply situation for phosphate looking like.

    The news about Chinese phosphate sales should be good for the market but it remains unclear what the volumes of exports will be. Any tons will help and will put some downward pressure on price but the world market remains extremely short of product and ideally the Chinese need to be exporting close to 1 million tons per month for the 2nd half of the year.

    Brazil saw further small price drops this week as they continue to benefit from Russian phosphates flowing their way. Phosphate stocks in ports and warehouses are said to be very high, so importers are feeling the pressure to start selling product.

    Trade data for MAP imports into South Africa for the period January-April shows that around 43,000t were imported, down 26% on the 58,000t imported in the same period last year. We do understand that a number of cargoes are planned to sail to this region in the next 6 weeks or so.

     

    Potash

    Mixed price directions for potash across different regions this week. In the Asian markets there is some upward price support as demand remains fairly strong. In the Americas weak demand and increasingly available Russian supply is pushing prices down. 


    The flow of Russian potash into Brazil has now begun to impact prices there and small price reductions are being seen. Unfortunately this hasn’t translated to equivalent price adjustments in Southern Africa as the potash supplied to the region has come from traditional origins such as Germany, Canada and Chile and thus not under the same pressure to discount as the Russians.

    Another indicator of demand destruction seen is the 22% reduction in potash imports by the USA for the period January to April this year. US importing for their current season is largely complete, so this trade data is a good guide to the real impact that high potash prices have had on the buying of potash.

    Potash imports have been flowing into Southern Africa and port stocks have built to comfortable levels. Local demand for potash remains extremely quiet, probably because farmers are more focused on harvesting right now, plus buyers are hopeful of lower prices if they wait. This situation could change very quickly though as port congestion remains a massive headache for importers and the situation is likely to get worse as fertilizer imports start to ramp up for the next 3-4 months. Already some vessels are facing 20-30 day waiting times for a berth, and this is may well become longer as shipping traffic increases.

     

    General Market Outlook 

    Another volatile but strong week for crude oil, as gas prices start to respond to rising summer demand. 

    Brent crude oil rose into the mid-$120s/bbl during the week but closed at $122/bbl as negative economic news around a new Chinese covid lockdown cooled the market. There are also signs from the US that its demand for oil may slow as the impacts of expensive oil are now starting to be felt throughout its economy. European gas users were enjoying their best week in many months as prices slid to $25/MMBtu only to be shocked by a fire at a major US LNG export hub. Then sent European prices racing back up to $26.5/MMBtu – the US supplies more than half of Europe’s LNG. Earlier in the week, US gas prices were pushing $9.5/MMBtu on expectations of a very hot summer fueling gas demand but the outage of the Freeport LNG export facility meant that gas earmarked for export was redirected back into the US domestic market and pushed prices down to around $8.9/MMBtu by the end of the week. 

    CME maize prices firmed nicely over the past week, with the July marker rising almost 6%. Unfortunately the same rise was not experienced in the local market with white and yellow maize both shedding about 1% on the July contracts. Likewise sunflower was down on the week and only soya enjoyed a positive week on the local markets.


    Latest Direct Hedge quotes for urea and MAP swaps in USD:

     

     

    Arab Gulf
    10 June 2022

    Arab Gulf
    2 June 2022

    Week-on-week change

     

    Bid

    Ask

    Bid

    Ask

    Bid

    Ask

    Jun-22

    630

    650

    650

    700

    -20

    -50

    Q3-22

    600

    650

    650

    700

    -50

    -50

     

    Jul-22

    600

    660

    650

    695

    -50

    -35

     

     

    Aug-22

    600

    660

    -

    -

    -

    -

     

     

    MAP Brazil CFR
    10 June 2022

    MAP Brazil CFR
    2 June 2022

    Week-on-week change

     

    Bid

    Ask

    Bid

    Ask

    Bid

    Ask

     

     

     

     

     

     

     

    Jun-22

    1,050

    1,100

    1,050

    1,100

    -

    -

     

    Jul-22

    1,100

    1,200

    1,100

    1,200

    -

    -

     

     

     

    The urea Swaps market continued its downward correction, shedding around $50 on most of the monthly quotes. The physical market has shown a sustained downturn over the past month and more declines are expected, hence the forward market is correcting rapidly in line with the physical. The question that is getting louder is “where will urea bottom out, before it starts its seasonal upturn in the later part of the year?”. Our expectation was that urea would probably bottom out somewhere in the $600s but with the forward market already touching $600, it seems that the market may fall lower – at least into the high $500s and possibly down to $550/t. When the Swaps quotes start to stabilize, we should get a good sense of where the market sees the bottom of the current urea downturn.

    The MAP Swaps market saw no changes again this week.

    If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.

    Andrew Prince 


    This email address is being protected from spambots. You need JavaScript enabled to view it.

     

    This email address is being protected from spambots. You need JavaScript enabled to view it.

  • Only focusing on the transfer of land to previously excluded communities as a measure of successful land and agriculture reform, as currently appears to be, is spectacularly misplaced.  

  • Scientists have engineered new signalling networks to produce crops that need less fertiliser. The novel synthetic plant-microbe signalling pathway could provide the foundation for transferring nitrogen fixation to cereals.

  • The reason the productivity of industrial agriculture is now under threat is because it has been systematically degrading the human and natural capital on which it relies.

  • At least 8 Billion US Dollars of investment in basic storage and 65 Billion US Dollars spending on irrigation will be necessary in order to boost total irrigated area to 15 per cent from its 2019 level of 5 per cent.

  • I am a long-standing farmer and representative of the organic movement, but it is only recently that I have come to see just how much microbiology permeates every aspect of our lives

  • For decades, fertilizer was too expensive for African farmers. It had to be imported, and transportation into the continent was expensive. 

  • Whether due to tighter margins or environmental pressures, more field crop farmers are considering using technologies that improve the efficiency of nitrogen fertilisers.

  • This podcast argues over why farmer's should stop using synthetic chemical fertilizers. Chemical fertilizers have a significant effect on human and animal health as well. This podcast is made to inform people on the dangers of synthetic chemical fertilizers.