Nitrogen and urea prices are on the rise around the globe, and while prices recently jumped following the escalation of geopolitical conflicts in the Middle East, it has been a long-standing trend.
“Everybody got spooked. Everybody saw prices going up, and rightfully so. When you look at the Middle East and North Africa region, just that small part of the map, one out of every two tons of urea exported in the world comes from those two small areas. So, it was right to see that and get nervous, but from my point of view, from our point of view, that was not the actual cause of prices going up. We have been going through a lot this year with the EU region production still 75% normal in the urea market,” Josh Linville with StoneX explains. “That’s about 3.5 million tons less than normal Chinese exports, which are usually 5-5.5 million tons per year— January through August only 245,000 tons, and not much optimism that’s going to improve here October, November, December. There’s been production problems in Egypt. There’s been production problems in Brazil. So globally, nitrogen has been very, very highly supplied.”
Linville says that while tensions in the Middle East may be tighter for higher fertilizer prices, they are not the sole reason.
