Navigation Links
World fertilizer prices drop dramatically after soaring to all-time highs
Date:12/16/2008

World fertilizer prices began dropping dramatically in late 2008 after reaching all-time highs around April.

The price of urea, the world's most common nitrogen fertilizer, rose from about $280 to $405 per ton in 2007 and reached $452 in April 2008. The price then soared to $815 per ton in Augustbut plunged to $247, lower than before the price spiral began, in mid-December.

The price of diammonium phosphate (DAP) increased by five timesfrom $262 to $1,218 per tonfrom January 2007 to April 2008, but had fallen to $469 per ton in mid-December.

Potash is the only fertilizer whose price is still rising. Standard grade muriate of potash, the most common source of potassium, sold for $172 per ton in January 2007 and $875 per ton in mid-December.

Why Fertilizer Prices Spiked: A "Perfect Storm"

"Fertilizer prices started rising rapidly in October 2007, and the price spike lasted for almost 12 months," says Ian Gregory, IFDC Agribusiness Specialist.

"Numerous factors converged simultaneously to cause fertilizer prices to soar, then suddenly collapse. Some have compared the series of events to 'a perfect storm.'"

Prices were essentially driven up by an imbalance between supply and rapidly expanding demand, especially in Asia, Gregory explains. Fertilizer demand reached a level that supply could not match. Demand was particularly strong in China and India. Another factor was increased demand for fertilizers to produce biofuels in the United States, Brazil, and Europe. Increased livestock production created still more demand for grain and thus for fertilizers. Grain reserves became historically low and prices rose sharply.

Further worsening the situation were China's imposition of high tariffs on fertilizer exports and the devaluation of the U.S. dollar in 2007 and 2008. Energy prices peaked, causing an increase in the price of natural gasessential for nitrogen fertilizer production. Phosphate prices were also driven up by a huge increase in demand and prices for sulfur, vital for production of the popular DAP and other high-analysis phosphate fertilizers. The supply of quality phosphate rock also became tight.

Why Prices Then Plunged Rapidly

Gregory explains why fertilizer prices fell so rapidly in late 2008. "The high fertilizer prices caused 'demand destruction.' Farmers were unable or unwilling to pay two or three times the prices of early 2007." Collapse of the global credit market, a trade recession, and slowdown in world economic growth worsened the situation. Demand for fertilizers fell and stocks accumulated. Fertilizer manufacturers cut back on production.

"But potash prices have stayed high due to its shortage and difficulties in transporting Russian potash because of an enormous and expanding sinkhole near the Silvinit mines," Gregory says. "Demand for potash increased from 2006 through 2008, and potash inventories are now 37% lower than over the past 5 years."

Price movements will probably be volatile for at least the next 2 years, until new production facilities open and the current lower prices for nitrogen and phosphate recover, Gregory says.


'/>"/>

Contact: Dr. Thomas Hargrove
thargrove@ifdc.org
256-381-6600
IFDC
Source:Eurekalert  

Related biology news :

1. In the animal world, bigger isnt necessarily better
2. World Energy Outlook to be presented at Rice University Dec. 9
3. 100-meter sprint world record could go as low as 9.48 seconds
4. New national park protects worlds rarest gorilla
5. Worker ants of the world, unite! You have nothing to lose but your fertility
6. Oak Ridge supercomputer is the worlds fastest for science
7. Marine invasive species advance 50 km per decade, World Conference on Marine Biodiversity told
8. Less than one month to opening of world’s largest global congress on osteoporosis
9. Arid aquaculture among livelihoods promoted to relieve worsening pressure on worlds drylands
10. Marine invasive species advance 50km per decade, World Conference on Marine Biodiversity told
11. Worlds rarest big cat gets a check-up
Post Your Comments:
*Name:
*Comment:
*Email:
Related Image:
World fertilizer prices drop dramatically after soaring to all-time highs
(Date:5/3/2016)... 3, 2016  Neurotechnology, a provider of high-precision ... Automated Biometric Identification System (ABIS) , a complete ... MegaMatcher ABIS can process multiple complex biometric transactions ... of fingerprint, face or iris biometrics. It leverages ... and MegaMatcher Accelerator , which have been ...
(Date:4/28/2016)... April 28, 2016 First quarter 2016:   ... 966% compared with the first quarter of 2015 The ... 589.1 M (loss: 18.8) and the operating margin was 40% (-13) ... Cash flow from operations was SEK 249.9 M (21.2) ... guidance is unchanged, SEK 7,000-8,500 M. The operating margin ...
(Date:4/26/2016)... , April 27, 2016 ... "Global Multi-modal Biometrics Market 2016-2020"  report to their ... , The analysts forecast the global ... of 15.49% during the period 2016-2020.  ... of sectors such as the healthcare, BFSI, transportation, ...
Breaking Biology News(10 mins):
(Date:6/24/2016)... 2016  Regular discussions on a range of subjects including ... two entities said Poloz. Speaking at a lecture ... , he pointed to the country,s inflation target, which is ... "In certain areas there ... common economic goals, why not sit down and address strategy ...
(Date:6/23/2016)... ... June 23, 2016 , ... ... announce the launch of their brand, UP4™ Probiotics, into Target stores nationwide. The ... is proud to add Target to its list of well-respected retailers. This list ...
(Date:6/23/2016)... ... June 23, 2016 , ... Charm ... Mold) microbial test has received AOAC Research Institute approval 061601. , “This is ... last year,” stated Bob Salter, Vice President of Regulatory and Industrial Affairs. “The ...
(Date:6/23/2016)... OTTAWA, ON (PRWEB) , ... June 23, 2016 , ... ... former DNA Technical Leader at the Arkansas State Crime Laboratory, has joined STACS DNA ... joining the STACS DNA team,” said Jocelyn Tremblay, President and COO of STACS DNA. ...
Breaking Biology Technology: