Just before Christmas, there was information that nitrogen fertilizers are becoming more expensive. The price of ammonium nitrate exceeded 4000 PLN. PLN per ton net. What now? Only a few companies have price lists and sells, most of them withholding them until the new year. Rather, it will be more expensive.
We were the first to report sharp increases in nitrogen fertilizer prices on December 23, the day before Christmas Eve.
We got a lot of information from farmers who said that ammonium nitrate from the recently shockingly high price of 2,600 PLN net rose to more than 4,000. PLN, and urea up to PLN 5,500 / t net. It has “boiled” on the internet and on social media. Farmers shared some price lists and reported that most distribution companies do not sell. They asked what is going on.
Ask the producers about the price
We also sent such a request to two Polish fertilizer producers, Anwil and Grupa Azoty. We received information from Anwil about the announcement of this topic posted on his website.
– The profitability of fertilizer production, especially nitrogen fertilizers, was limited by changes in gas prices, which increased by up to 600% over the past year. This situation put a heavy burden on fertilizer manufacturers and some of them stopped production. ANWIL, as one of the few companies, has maintained continuity of production and ensured the availability of this product, important for the agricultural industry, in the market. Currently, gas prices already account for 90% of the production costs of nitrogen fertilizers. Comparing prices from December of this year to the same period of 2020, the price of gas increased more than 7 times (December 2020 – about PLN 72.15 per MWh versus December 2021 approx. PLN 531.51 per MWh *). Negative trends can be seen not only in the Polish market. Decisions made by foreign chemical companies clearly show that the issue of rising gas prices in tariffs for industrial customers is a global problem. Almost all entrepreneurs who use this raw material in production struggle with it. At ANWIL, a pre-planned technical freeze on one of the fertilizer production lines is currently underway. Anuel reported that the company is taking all steps and efforts to minimize the impact of the macroeconomic situation on its target customers.
“We monitor gas prices constantly, and they have corrected downward during the holiday season.” We operate flexibly and will continuously adjust your bid according to market realities.
– Daria Studzynska (@RzecznikANWIL) December 27, 2021
Grupa Azoty has not yet responded. We have the Christmas season, and it is undoubtedly also not conducive to communication, because many people are currently on vacation. So getting official feedback on this important matter is difficult. Agrochem Puławy – the authorized distributor of Grupa Azoty fertilizers, in which the price list of the company’s products is published, has not changed since November 26.
Market information on fertilizer prices
We have more unofficial information. Editorial office called several distribution points Fertilizer sale in Poland. We also spoke to several company representatives and there is one message everywhere. Most of the time, the sale is pending. Usually this is explained by the lack of products, especially nitrogen fertilizers: ammonium nitrate and urea.
There are no price lists, and therefore fertilizer prices are usually not officially given. This is the change after the new year. According to some, sales will begin in the first days of 2022, according to others – after January 15, 2022. There are no clear answers here. Informally, it is said on the one hand that the fertilizer yards in the companies are empty and waiting for shipments from producers, and on the other hand there are goods, but they are waiting for higher prices.
Everyone agrees that it will be more expensive. Because when inquiring about the price of ammonium nitrate which was given on December 23 i.e. 4000 PLN per net ton, we learn at several points that it could even reach 5000. Would it be so? We hope not, but the topic is definitely “hot potatoes”.
What is the reason for the high prices? Here, too, no one wants to say directly. But the market is definitely very tense. Everyone watches each other and wants to break something for each other. The speculative factor is not without significance, and this is also, of course, informally recognized by company representatives.
I’m more interested in who in the EU allowed EU and US natural gas prices to diverge so much.
It is enough to look at the graphs to find out that someone slept here. (I mean the graph itself, not the units) pic.twitter.com/Wow1v1DJ0T
– Piotr (@PiotrPodkarpac1) December 27, 2021
– Russian gas giant Gazprom did not retain the capacity to transport gas for exports via the Yamal-Europe gas pipeline on December 27, auction results showed on Monday, Reuters reported.
Monday’s auction results showed that Gazprom did not book gas transportation capacity for exports via the Yamal-Europe pipeline on December 27. https://t.co/0LCNC5Ls2P
– Wojciech Jakóbik (@wjakobik_en) December 27, 2021
At the end of this series there is a farmer calling and asking after the holiday season, but mostly he doesn’t answer. Prices were amazing before, now it’s hard to tell… What will happen next? We will definitely keep an eye on the market and keep you informed.
What are the fertilizer prices?
We remind you that in January 2020, the average price of a ton of ammonium nitrate was PLN 1000. A year later, in January 2021, the price was 1120 PLN, and in June it rose to 1250 PLN.
At the beginning of September and October, it recorded a staggering increase to 3 thousand. pln / t. Later, after the publication of the price list of Agrochem Puławy, in the third decade of October, the price fell slightly to about 2600 PLN / net ton. It lasted until December 23. What will happen now? Many farmers do not believe what is happening. They declare that if the prices are too high, they will not buy fertilizers anymore and they will not buy them anymore. This season is waiting.
In the Facebook profile of Kula RRK (Mateusz Kulecki) you can find an account of the costs of planting 1 hectare of wheat at such high prices for fertilizers. – At your request, I make a brief calculation of production costs for the cultivation of 1 hectare of wheat. The calculation is not accurate, but it gives some pictures of the profitability of the crop at today’s prices. Only one question remains: what can we buy with this money? – The famous farmer Kula wrote on Facebook. The account was made (screen below).
What are your experiences and thoughts on this topic? Write in the comments.
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