Fertilizer Prices Are Decreasing Amid Bloating Inventories

Prices of fertilizers are experiencing a sharp decrease as farmers hold off buys due to high ingredient costs, pulling the market down and causing a surplus.

This year, after sanctions were imposed on major producers, Belarus, and Ukraine – Russia war triggered the increase in crop nutrient prices. With this, international fertilizer firms increased their purchases and chose to move huge amounts of products to prevent any issues with supply chains and trade restrictions.

These actions have caused a surplus of fertilizers in inventories in other areas and farmers are refusing to purchase.

In a weekly index for common nitrogen fertilizer urea in New Orleans went down by 3.2%, which prolongs the monthlong downward trend as US farmers are anticipating how low prices will go. Farmers in Brazil are also stopping their purchases which continues to drive fertilizer prices down.

According to Bloomberg Intelligence, global prices of nitrogen continue to trade at almost five times the historical averages.

Fertilizer industry players bet that farmers would purchase fertilizers, especially with the current high prices of grains and news of shortages. But ever since farmers saw crop prices coming down from highs, they chose to cut down on expenses and changed their fertilizer usage, deliveries, and the effects on future yields.

According to Josh Linzille, StoneX Director of Fertilizer, the beginning of the fall fertilizer application season in the US has not been doing well.

Brazil, which is the largest importer of fertilizer in the world, is also dealing with similar issues.

Source: Business Mirror