Just before Christmas, there was information that nitrogen fertilizers became more expensive. The price of ammonium nitrate exceeded PLN 4,000. PLN per tonne net. What now? Only a few companies have price lists and sell, most of them withheld it until the New Year. It is to be even more expensive.
We were the first to inform about the sharp increases in the prices of nitrogen fertilizers on December 23, the day before Christmas Eve.
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We had a lot of information from farmers who said that ammonium nitrate from the recently and such horrendously high price of PLN 2600 / t net increased to over 4,000. PLN, and urea up to even PLN 5,500 / t net. It “boiled” on internet forms and on social media. Farmers shared a few price lists and reported that most distribution companies were not selling. They asked what was going on.
Asking the producers about the price
We also sent such a request to two producers of Polish fertilizers, i.e. Anwil and Grupa Azoty. We received information from Anwil about the announcement on this matter posted on their website.
– The profitability of the production of fertilizers, especially nitrogen fertilizers, has been limited by changes in gas prices, which increased by as much as 600% over the last year. This situation put a heavy burden on fertilizer manufacturers and some of them stopped production. ANWIL, as one of the few companies, maintained the continuity of production and ensured the availability of this product, important for the agricultural industry, on the market. Currently, gas prices already account for 90% of the production costs of nitrogen fertilizers. Comparing the prices from December this year to the same period in 2020, the price of gas increased more than 7 times (December 2020 – approx. PLN 72.15 per MWh vs. December 2021 approx. PLN 531.51 per MWh *). Negative trends can be seen not only on the Polish market. The decisions made by foreign chemical companies clearly show that the issue of rising gas prices in tariffs for industrial customers is a global problem. Virtually all entrepreneurs who use this raw material in production struggle with it. At ANWIL, a previously planned technological standstill of one of the fertilizer production lines is currently underway. The company is taking all steps and efforts to minimize the impact of the macroeconomic situation on target customers, Anwil reported.
????We are constantly monitoring gas prices, and these have been corrected downwards during the holiday season????⬇️. We operate flexibly and we will adjust the price offer to the market realities on an ongoing basis.
– Daria Studzińska (@RzecznikANWIL) December 27, 2021
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Grupa Azoty has not yet responded. We have a Christmas season, which is undoubtedly also not conducive to communication, because many people are currently on vacation. Therefore, getting official comments on this important matter is difficult. Agrochem Puławy – the authorized distributor of Grupa Azoty fertilizers, where the price list of the company’s products was published, has not changed since November 26.
Market information on fertilizer prices
We have more unofficial information. The editorial office called several distribution points sale of fertilizers in Poland. We also talked to several company representatives and there is one message everywhere. Most of the time, the sale is on hold. This is usually explained by the lack of products, especially nitrogen fertilizers: ammonium nitrate and urea.
There are no price lists and hence the prices of fertilizers are usually not officially given. This is to change after the New Year. According to some, sales will start in the first days of 2022, according to others – after January 15, 2022. There are no clear answers here. Unofficially, on the one hand, it is said that the fertilizer yards in companies are empty and waiting for deliveries from producers, on the other hand, there is goods, but waiting for higher prices.
Everyone agrees that it will be more expensive. Because when asking about the price of ammonium nitrate, which was given on December 23, i.e. 4,000 PLN per tonne net, we learn in several points that it can even reach 5,000. Will it be so? We hope not, but the topic is definitely “hot potato”.
What is the reason for such price increases? Here, too, no one wants to say directly. But the market is definitely very nervous. Everyone is watching each other and they want to break something for each other. The speculative factor is not without significance, and this is also, of course, unofficially, admitted by representatives of the companies.
I’m more interested in who in the EU allowed the natural gas prices in the EU and the US to diverge so much.
It is enough to look at the charts to see that someone has overslept here. (I mean the graph itself, not units) pic.twitter.com/Wow1v1DJ0T– Piotr (@ PiotrPodkarpac1) December 27, 2021
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– The Russian gas giant Gazprom did not reserve gas transit capacity for exports via the Yamal-Europe gas pipeline for December 27, as the results of the auction on Monday showed, Reuters reported.
Gazprom has not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec. 27, auction results showed on Monday https://t.co/0LCNC5Ls2P
– Wojciech Jakóbik (@wjakobik_en) December 27, 2021
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At the end of this chain is a farmer who calls and asks after the holiday season, but mostly no answers. Prices were dizzying before, and now it’s hard to even define … What will happen next? We will definitely keep an eye on the market and keep you informed.
What fertilizer prices?
We remind you that in January 2020, the average price of a ton of ammonium nitrate was PLN 1,000. Then a year later, in January 2021, the price was PLN 1,120, and in June it increased to PLN 1,250 / t.
At the turn of September and October, it recorded a spectacular increase to 3 thousand. PLN / t. Later, after the publication of the Agrochem Puławy price list, in the third decade of October, the price dropped slightly to approx. PLN 2,600 / t net. And it lasted until December 23. What will happen now? Many farmers do not believe what is happening. They declare that if the prices are so high, they simply won’t buy fertilizers anymore, they won’t buy them anymore. This season is waiting out.
On the Facebook profile of Kula RRK (Mateusz Kulecki) you can find a calculation of the costs of growing 1 ha of wheat at such high prices of fertilizers. – At your request, I am putting in a short calculation of the production costs of growing 1 ha of wheat. The calculation is not exact, but it does give some picture of the profitability of the crop in today’s prices. Only one question remains: what are we able to buy with this money? – wrote the popular farmer Kula on fb. And he gave the calculation (screen below).
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Source: Facebook Kula RRK
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