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Economist says seasonality could help limit volatility in fertilizer markets

Russia’s invasion of Ukraine continues to wreak havoc on global markets, but an economist with RaboResearch says seasonality could help limit volatility on some fertilizer prices.

Farm inputs analyst Sam Taylor the markets have actually been relatively stoic over the last couple of weeks.  “You have seen price movement ranging from down in the Chinese market to up about 17 to 20 percent for other macronutrients in different benchmarks,” he says. 

However, Taylor says supply disruptions create additional challenges as the pipeline that sends Russian ammonia through eastern Ukraine and onto the Black Sea for export has been cut off.  “If the product is not flowing as normal, the price volatility is further exacerbated,” he says.  “I would expect price volatility and I would imagine there would be quite a widespread between some of the top and bottom line pricings on individual macronutrients globally as you see these supply chains realign.”

Russia accounts for 22% of global exports of ammonia, a key ingredient in nitrogen fertilizers, 14% of global urea exports, and 14% of monoammonium phosphate (MAP) exports.  And both Russia and Belarus each account for about 20% of potash exports.