According to the Center for Industry and Trade Information (Ministry of Industry and Trade), Fitch Ratings (one of the three largest and most prestigious credit rating organizations in the world), has just released an April report on fertilizer price prospects. on the world market.

According to this report, in the next 3 years, the world fertilizer price is forecasted to decrease. The reason is that the world fuel prices are quite cheap, the fertilizer supply is higher than the demand, and the impact from the Covid-19 pandemic.

In terms of fuel, Fitch Ratings said, the price of liquefied natural gas (LNG) in Asia is now only nearly half of the price in June 2019. Worldwide reserves of LNG as well as gas have increased due to Covid-19. It is forecasted that the price of natural gas and thermal coal will decrease in the long term due to the imbalance in the balance of supply and demand. These factors will have a drastic effect on the prices of nitrogen and phosphate fertilizers.

The Covid-19 pandemic disrupted food supply chains, from production, purchase, transportation, processing, preservation to consumption. Thereby, greatly affecting agricultural production and prices of agricultural products globally. Therefore, the demand for fertilizer is also significantly affected.

With Urea fertilizer, in the period 2020-2021, the Black Sea Urea price (FOB price) is forecasted to be in the range of 230-240 USD / ton due to the influence of Covid-19, which makes demand decrease. The Chinese government implements a policy to reduce the abuse of nitrogen-containing fertilizers in the country, also contributing to reducing Urea demand.

In addition, China’s shift from urea production using high-priced anthracite coal to Urea using cheap bituminous coal will also have an impact on Urea prices in the period from 2022-2025.

Natural gas prices for 2020 and 2021 are forecast to be at their lowest levels in a decade. Therefore, it is forecasted that ammonia prices will drop. Currently, the supply of ammonia is in excess of the demand, and it is difficult to be completely absorbed in a short time even when the global demand increases.