How long can international urea prices rise?

    People generally do not understand the behavior of the urea market, which has led some observers to use 2012 and 2008 as a way of predicting price evolution, when urea prices soared to mid-year highs.

   Whether these comparisons are effective remains to be seen. Both of these years have similarities with 2021, but there are also differences, especially the timing of corn price increases and the level of US natural gas prices in 2008.

   However, in the past two years, prices began to fall around the beginning of August, partly because buyers found that prices were too high. Our price has not reached the high point of previous years. This week traders paid the Middle East urea US$400/ton FOB, Egypt’s urea US$415/ton FOB and Algeria’s urea US$416/ton FOB, all in August Ship.

   The market will last at least a few weeks.

India: Only about half of the quantity required for RCF bidding was purchased. It is expected that there will be a new tender for procurement of more than 1 million tons in July.

China: Tight supply has pushed up domestic prices to record levels. When this situation persists, exporters have to pay more than US$400/t FOB.

United States: Dealers pay higher prices for urea in summer than in spring. The turning point will reduce U.S. production in the summer.

30-60 day outlook

Traders are buying in advance, and prices are expected to rise further in a tight market. Buyers are forced to follow up.