In the Mekong Delta, urea consumption demand is expected to start increasing in early winter-spring rice sowing areas, however direct consumption remains low, mainly dealers will import goods before the crop.
The price of urea fertilizer - the leading fertilizer in the domestic market - is currently closely following the price fluctuation trend in the world market.
Currently, domestic urea prices are stable while world urea prices fell last week after nearly 3 weeks of price increases.
World urea prices "cool down"
According to statistics from market research companies Argus and Fertecon, in early October, world urea prices continued to increase thanks to support from Indian bidding and escalating conflicts in the Middle East.
In the Middle East, granular urea prices increased from $330-335/ton FOB (FOB-price at the seller's country's border gate) at the end of September to $356/ton FOB for shipments in the second half of October and November.
In Iran, offers for granular urea also increased sharply to $315/mt FOB, with the most recent transaction in the week of October 1 recorded at $307/mt FOB.
In Egypt, producers continued to close October-November cargoes at prices that increased from $375/mt FOB on October 1 to $407/mt FOB on October 7, with total transactions during the period reaching nearly 80,000 mt, mostly destined for Europe.
However, the market still has a lot of urea supply from Iran, preventing urea prices in the region from increasing further.
In the Americas, urea prices rose in early October following escalating tensions in the Middle East. Most of the earlier offers were withdrawn by suppliers and prices were raised from October 3.
Of which, barge prices at Nola port (USA) increased to 314-337 USD/st FOB Nola. Granulated urea prices in Brazil increased by about 2-5 USD/ton compared to the end of September to 362-375 USD/ton CFR, with offers increasing as high as 380 USD/ton CFR (CFR price is the sum of FOB price and freight).
In Europe, in early October, urea prices continued to rise following tensions in the Middle East, however, demand was low, and with the sudden increase in prices, many buyers withdrew from the trading market.
In Africa, demand has increased sharply in most regional markets such as Mauritania, Mali, Kenya, Rwanda, Ethiopia, South Africa... with a series of consecutive urea import tenders issued in preparation for the new crop season.
Meanwhile, producers such as Nigeria and Algeria also offered increased urea prices following the trend of urea prices in Egypt.
In early October, urea purchases continued and there was still a lot of demand in East Africa and South Africa in the fourth quarter of 2024. However, due to high prices, some importers were also more cautious in purchasing new goods to avoid price risks.
In the Black Sea/Baltic Sea region, urea prices continued to increase in early October, but liquidity was limited, as buyers tried to reduce prices to $340/mt FOB Black Sea or below, while offers from suppliers were around $353-358/mt FOB for granular urea.
However, after many consecutive weeks of increase, world urea prices fell across the board last week while the market was expecting a new bid from India.
In Brazil, granular urea prices fell to $370-$375/ton CFR; some small cargoes arriving in late October were around $380/ton CFR, while new cargoes (free) were $5-$10/ton cheaper. In the US, urea prices at NOLA fell $2.5/ton to $325-$328/ton FOB.
Spot prices in the Middle East are at $370-$380/mt FOB but supplies are limited. In Iran, Shiraz sold 30,000 mt of urea at $327/mt for delivery in the first half of November; while Lordegan also opened a tender to sell at least 20,000 mt of urea, closing on October 27, for delivery in the first half of November from BIK port.
In Egypt, limited activity kept urea prices stable on the day at $390-$395/mt FOB. However, downward pressure remained due to lack of buying power.
The Argus Fertilizer Europe conference in Athens did not help Egyptian producers clear remaining stocks for October as well as for November, except for an unconfirmed deal at $395/mt FOB.
Some producers appear increasingly likely to be forced to enter at $385/mt FOB or below to attract buyers, but importers remain on the sidelines, with demand in Europe muted.
In Shandong (China), the price of granular urea was stable at 1,780-1,800 yuan/ton. In Hebei, the price of granular urea decreased to 1,780 yuan/ton. In Inner Mongolia, the price of granular urea remained at 1,650-1,700 yuan/ton. In Shanxi, the price of granular urea was stable at 1,700 yuan/ton, while that of opaque granular urea decreased to 1,800 yuan/ton.
In Southeast Asia, urea prices were steady last week, with most suppliers and buyers focusing on the upcoming Indian tender. Urea prices were highest in the Philippines, supported by higher freight rates and stable domestic prices. But tropical storms are causing flooding, affecting the current crop harvest.
Granular urea prices reached $415/ton CFR, while clear granular urea was offered at a premium of $10/ton. In Thailand, high inventories kept importers away from the market.
Freight rates to most Southeast Asian countries are rising due to longer anchoring times due to poor weather conditions and a lack of available vessels in the shipping market. Granular urea prices are down to $375-380/mt FOB on weaker signs.
Argus forecasts that the next Indian tender, due next week, will keep urea prices from the Middle East and Baltics intact until the end of the year. The tender is expected to focus on vessels for late December delivery, mainly targeting the West Coast of India.
The market has received some support, as producers are focusing on November commitments and continuing to deliver on commitments signed under India’s recent urea tender.
One producer said supplies for November were very limited, while another source said “there is no available supply in the region.”
However, agricultural demand has shown signs of softening and export news has been limited, with expectations that any export quotas are unlikely to take place until 2025.
In addition, affordability issues in Europe and the Americas will push prices down gradually in December. Prices will not fall sharply as external demand remains strong. Europe, the US and Australia will push prices up again in January 2025.
Domestic urea prices are stable.
Meanwhile, in Vietnam, granular urea prices were offered at $410/t FOB, bulk, although very few transactions were reported.
Some Vietnamese importers were looking to buy bulk urea at around $380-$390/mt CFR, with negotiations reaching as high as $405/mt CFR earlier in the week. But forecasts of storms and poor weather conditions have kept buyers away from the market.
According to market research company Agromonitor, in October, domestic consumption demand will improve compared to September, however, it is not yet the peak season for the winter-spring crop for rice and vegetables, so purchasing power is not strong.
Exports in October may double the September level as the domestic market was sluggish in September, forcing factories to increase their export orders for October-November. Supply in October is expected to remain higher than in September due to high inventories at the beginning of the month and continued slight increases in production.
Inventory is expected to increase slightly this October. Since the beginning of October, dealers in the regions have returned to buying goods to stock up (after a lull in September) due to concerns that prices may continue to rise, and transactions in early October have improved.
Since early October, due to the shortage of available goods on the market because factories supply small quantities and focus on exports, urea prices have maintained an upward trend in late September and continued to rise in early October.
At the same time, the increase in domestic prices was also supported by the increase in world urea prices before the announcement of India's urea import tender being released and closed on October 3.
Consumption in October is expected to reach about 90 thousand tons, a slight increase of 20 thousand tons compared to September.
In the Mekong Delta, urea consumption demand is expected to start increasing in early winter-spring rice sowing areas, however direct consumption remains low, mainly dealers will import goods before the crop for storage.
In the Red River Delta, demand for early winter vegetables increased slightly in October.
It is expected that in October, NPK compound fertilizer factories will increase their capacity to produce NPK finished products to meet the demand for fertilizing crops during the peak winter-spring crop season. Therefore, the amount of urea used as raw material for production is expected to increase to 45,000 tons.
Vietnam's urea exports in October are expected to reach 90,000 tons, double that of August, with at least one vessel delaying its loading time from September to October due to bad weather in the northern region in September.
Inventory in October 2024 is expected to continue to increase slightly, however, in early October there was a lot of positive information in the world market such as increased Indian bids, China still restricting exports, world prices are forecast to increase in October-November, Southeast Asian urea offers to Vietnam also increased, so it is expected to support domestic prices.
On average, urea prices have increased by about 50-600 VND/kg in the first 10 days of October. In particular, the price of Ca Mau urea transferred to Saigon/Southwest increased to 10,900-11,000 VND/kg from October 7; then continued to increase to 11,000-11,200 VND/kg after receiving information that the manufacturer continued to increase the order price by 500 VND/kg from October 9 to 10,500 VND/kg at the factory and 10,600-10,650 VND/kg at transit warehouses in the regions.
Level 1 agents in the Southwest have offered Ca Mau urea delivered to level 2 warehouses at an increased price of 11,000-11,600 VND/kg when buying urea alone and 10,600-11,000 VND/kg when buying with a set of products including NPK.
Regarding Phu My urea, on October 7, the factory issued a new order to sell urea, in which, at the Southwest transit warehouse, the order price increased to 10,200 VND/kg (up from 9,900-10,100 VND/kg on September 5); traders/agents offered the price of Phu My urea transferred at the Southwest transit warehouse to the same level as the order price.
Regarding Ha Bac/Ninh Binh urea, on October 3, manufacturers also announced an increase in the order price to 9,800 VND/kg (commercial goods), the factory-based offer price increased to 9,600 VND/kg for Ninh Binh urea and 9,700-9,800 VND/kg for Ha Bac urea.
For imported goods, traders and agents offered warehouse prices of Brunei urea in Saigon and Long An increased to 10,100-10,300 VND/kg and Malaysian urea increased to 10,300-10,500 VND/kg - an increase of 200-400 VND/kg compared to the end of September.
According to data from the General Department of Customs, in the first 9 months of 2024, the country's imported fertilizer volume reached nearly 3.85 million tons, worth 1.28 billion USD, with an average price of 332.2 USD/ton, up 32.3% in volume, up 29.7% in value but down 2% in price compared to the same period in 2023.
In terms of export, in the first 9 months of 2024, the whole country exported over 1.29 million tons of various fertilizers, equivalent to nearly 530.66 million USD, with an average price of 410.3 USD/ton, up 8.5% in volume, up 8% in turnover but down slightly 0.4% in price compared to the same period in 2023.
In general, since the beginning of the year, the domestic fertilizer market has been stable, prices have been stable. Domestic fertilizer manufacturers have made efforts to produce, ensure domestic fertilizer supply and aim to export the types of fertilizer that are in surplus in the country.
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