The global price rises we have witnessed in urea over the past month have led to a softening in demand in key importing countries including Brazil, US and India.
As we have seen several times in the cycle, a surge in prices causes farmers to delay or reconsider nitrogen applications, despite what the crop margins are implying.
Fertiliser merchants are watching the European gas prices very closely with the recent price spike allegedly causing a reduction in production by 40%- as producers were losing money. Looks like China has completely withdrawn from the export market.
Locally- spot supply of urea looks good- with the higher prices reducing demand. Spot supply in Victoria is very tight, with traders not willing to take the risk on imports and demand higher than expected given recent rainfall.
Phosphate market continues to drift lower- with lack of any real spot demand. With China continuing to sell small amounts of MAP/DAP- it is enough to keep prices in check.
Locally, traders still have stock of DAP to move from last season- so MAP/DAP continue to trade below import parity and are therefore relatively cheap.