The future of fertilizers market

| Foreign Markets |

The key to success in the fertilizers business is vigilant monitoring of local and global market trends. We have recently heard some information from various parts of the world that are bound to have a major influence on the prices of fertilizes in 2013/2014 season.

On the one hand, news from the Far East will certainly shape the situation in the business. It has been announced that exports of urea manufactured in China reached 7.2 million tonnes in the period from July 2012 to February 2013. In the previous “export window”, this figure reached only 3 million tonnes. This factor ought to be taken into consideration, especially that the next export window will be closed this summer. Another important element of the pricing situation is the lowering of Chinese exports duties, which will fall to 2% as of June 1st 2013. This rate will be in place until November 1st 2013, when the duties will rise to 77%.

The second key factor is the news about increasing output capacities in Algeria, Egypt and Russia. Those markets function in close proximity to EU, which means that developments in such countries always have an impact on the open European market.

The future of fertilizers market/fot. photopin.comCurrent situation in Ukraine is the third issue worth looking into. Wheat harvest is expected to reach a record high in 2013. US Department of Agriculture forecasts the Ukrainian wheat crops to reach 22.6 million tonnes, which is considerably more than 15.8 million tonnes in 2012. The harvest might be the highest in 20 years! What is more, there were no major losses after winter season, and the acreage of sowing increased by 20%. Undoubtedly, this will fuel growth of wheat exports. UkrAgroConsult, a company specializing in analysis of the Ukrainian market, forecasts a harvest of 20.23 million tonnes, whereas ProAgro – 19.89 million tonnes.

Consequently, we should also look into the sweetcorn production capacity in Ukraine. The Ukrainian manufacturers of corn have recently invested in premium imported seeds, which are a hybrid quality. Such positive news from our Easter neighbor will surely help Ukraine’s position on the international agricultural market, especially when it comes to the exportation of sweetcorn.