International fertilizer sellers tend to be strong
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India began to discuss domestic fertilizer subsidies in early 2010, and the policy was finally determined on November 19th – India’s purchase subsidies for nitrogen, phosphorus, potash and sulphur were drastically reduced. Currently, the retail price of diammonium is maintained at US$221/tonne, potassium chloride at US$112/tonne, and the government-issued diammonium subsidy has been reduced from US$361.5/tonne to US$288/tonne, and potassium chloride subsidy is from US$326.5/year. Ton dropped to 285 US dollars / ton. Whether it is for reducing government expenditure or applying pressure on foreign fertilizer suppliers, the overall amount of subsidy and subsidy prices has dropped at the same time. India's import negotiations will be completed by February next year (India's major contract cycle is from March to next February), due to the large volume of purchases, India's prices have affected the prices of the world market to a large extent, so the market of the global fertilizer market The focus is mostly on India’s import negotiations.
Just when everyone gave a bit of hope to the production of potash fertilizer in the CIS and China, on December 20th news of the merger of two Russian potash producers, Ural Potash and Silivit Potash Corps, came into being. After the merger, its output will account for With 17% of global potash production, it will become the second largest potash fertilizer producer in the world after Canada Potash Corp. This will undoubtedly strengthen the pricing power of potassium chloride suppliers in price negotiations.
Although according to the International Fertilizer Industry Association (IFA) estimates, the new year's global fertilizer utilization rate will hit a new high. From 2010 to 2015, a total of 55 sets of urea, 20 sets of potash fertilizers and 40 sets of phosphate fertilizer projects were put into operation globally, and the new investment amount exceeded US$40 billion. In addition, there will be 80 billion US dollars of new investment worldwide from 2011 to 2015. But Michelle, director of the IFA's production and trade department, believes that new projects will take at least 3 to 8 years from planning to production, so new capacity will not be released soon. Fertilizer demand continues to pick up under the drive of agricultural product prices, which will boost the consumption of chemical fertilizers. Global fertilizer sales this year are expected to increase by 2% to 3% over the previous year to reach 220 million tons, of which nitrogen fertilizer growth will be 3%. Phosphorus and potassium fertilizers increased by 5%.
As China, the major exporter of nitrogen and phosphorus fertilizers, officially issued a 2011 fertilizer export tariff policy on December 15, which caused fertilizer importers to start worrying that tight supply will cause prices to rise. According to China's latest export tariff policy, the off-season implementation time is shorter than that of 2010. China closed the urea export gate in January, November and December, and added a period of low-tariff export from September to October. Due to the shortened export period, industry insiders expect China's export volume in 2011 will fall from 5.5 million tons in 2010 to 3.5 to 4 million tons, of which only 100,000 to 150,000 tons of urea can be exported from bonded warehouses. When demand for fertilizers resumed in the Asian market in January, China’s supply of urea in the international market was very low, and it is very likely that the price of urea in the Middle East and other regions will increase. By November and December, when China imposes tariffs for the peak season, it is likely to cause a strong rise in international urea prices in the fourth quarter. In terms of phosphate fertilizers, the reduction of the diammonium low tariff period last year will affect the supply of diammonium in the fourth quarter. From July to August last year, China's export of diammonium exceeded 700,000 tons per month. According to this trend, it is estimated that the output of diammonium in 2011 may be reduced to 2.8 million to 3 million tons, while the export volume last year is estimated at 3.5 million tons. 3.7 million tons.
In general, the reduction in the supply of international fertilisers and the increase in demand may lead to large fluctuations in fertilizer prices, and it is expected that there will be a greater likelihood of a seller’s market.