Feb. 2021: The price of fertilizers rose unexpectedly. The prices for N fertilizers rose sharply in February 2021. KAS and AHL increased by around € 20 / t. Several factors play a decisive role in the price development:
- Energy prices have risen unusually sharply. Natural gas prices are of great importance for N fertilizer production because they account for around 70% of production costs.
- Grain prices have increased significantly in recent times. In the fertilizer sector, only a few suppliers dominate the market and price developments and are able to take advantage of the higher added value of the fertilizer users as a result of higher grain prices.
- As heavy goods, fertilizers are dependent on smooth (water) road transport. The recent onset of winter has created disabilities and delays.
The graphic above shows the long-term fundamental relationship between urea, corn and natural gas prices with current significance. Whether and to what extent fertilizer prices will continue to rise remains open for the time being.
- The onset of winter was short-lived; the fields are very wet and not passable so quickly. The fertilization dates are not urgent.
- The Fertilizer Regulation reduces the need for fertilizer. Organic fertilizer is abundantly available.
- The corona pandemic is slowing economic development worldwide, resulting in reduced energy requirements and possible falling oil prices.
Grain prices are currently experiencing a speculative soaring that is not necessarily covered by the fundamental supply situation.
