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U.S. Nitrogen Exports Jump as Europe Searches For Fertilizer By Stocksak

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© Stocksak. FILE PHOTO: A farmer spreads nitrogen fertilizer on his Blecourt wheat field, France, May 27, 2021. REUTERS/Pascal Rossignol/File Photograph

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Rod Nickel, Mark Weinraub & Maytaal Angel

CHICAGO/LONDON, (Stocksak), – U.S. fertilizer exports reached a multi-year peak this summer as higher European prices forced up production costs. This made U.S. shipments of the crop nutrient more competitive.

The U.S.’s rapid sales show the profound impact of the war in Ukraine on global food supplies and energy supplies. Russia, which is under financial sanctions, is a major supplier of fertilizer, natural gas, and key to making nitrogen products to increase the yields for corn and other crops.

Following Russia’s February invasion in Ukraine, Europe began to wean off Russian natural gasoline and a pipeline transporting ammonia through Russia to a Ukraine port.

Tight fertilizer supplies have caused a rise in crop nutrient prices worldwide. The United Nations warned this month about a “future crises” of availability. High costs have forced some European companies to close fertilizer plants.

According to the latest U.S. Census Bureau data, which was compiled by The Fertilizer Institute for Stocksak, exports from the United States, third-largest producer of nutrient, soared to 370,000 short tonnes in August. This is more than twice the previous year. This is the highest monthly total recorded since TFI began keeping track of the data in 2013.

Alistair Wallace, principal at Argus media in London, stated that European buyers outbid domestic buyers in the United States and other exporters such as Indonesia and Malaysia.

Separate TFI data showed that, despite the increase in exports, U.S. fertilizer supply was at its second highest level in the past decade. This indicates that there is a global dislocation rather than a shortage.

Jason Troendle, economist at TFI (NYSE:), said that it is unclear if the U.S. produced more than usual in August and July or diverted a greater share of supplies to Europe. Nutrien (NYSE:).

Troendle stated that the United States has historically been a small exporter. This limits its ability to fill market gaps.

Troendle stated that the countries with the highest year-over-year increases of U.S. purchase are Europe, including France, Belgium and Norway, as well as Brazil, Chile, and Morocco.

European countries tend to import most of their nitrogen fertilizer, urea, from North Africa. However, Wallace stated that they are now purchasing it from other parts of the world.

He stated that EU nitrogen prices eased in October because some European plants resumed production after the softening of natural gas prices.

Pekka Pesonen, secretary-general at Copa-Cogeca, stated that European farmers are unable to stockpile fertilizer as often as they should in preparation for planting next spring because of high prices and limited supply.

Pesonen stated, “We’re talking here about the need to have huge volumes over a very short period of time.”

U.S. growers may sow more fertilizer-intensive corn next season, despite high input costs. According to a Farm Futures survey, corn acreage is expected to reach 94.282 million acres next year, an increase of 6.4% over 2022.

Dave Nelson from Belmond in Iowa has seen his fertilizer prices rise to $1280 per ton this season, up from $350 per ton two year ago. He was able to lock in the price this fall and begin calculating his 2023 budget.

“I might as well do it because (price) is only going to go higher,” said Nelson, who grows corn and soybeans. “If you start skimping on fertilizer… you just end up hurting yourself in the end.”

Brazil, which imports 85% of its fertilizer, purchased more ammonium from the United States, Belgium, and Holland in January-September to make up for the reduced Russian supply, according to Itau BBA, an investment bank.

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Stocksak Editorial

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