Farmers who grow grain or vegetables may soon have a windfall. Fertilizer prices have fallen sharply in the past week and are lower than before the start of the war in Ukraine.
Then, the Russian invasion of the country caused fertilizer prices to skyrocket, leading to concerns about the international food supply.
A contract for the supply of one ton of ammonia gas in Tampa, an international standard for fertilizer prices, fell in price 25 percent in a week to $ 590. That is the lowest level since July 2021, reports market researcher Green Markets. Since January, the price has fallen by 40 percent.
Prices rose to record levels last year as the Russian attack on Ukraine seriously disrupted world fertilizer markets. Both countries are major fertilizer exporters, but the war blocked Ukraine’s ports. In addition, natural gas prices rose sharply, an essential raw material for fertilizer.
Fertilizer loads were also stuck in ports due to a lack of clarity about sanctions, including in the port of Rotterdam. But the grain deal, which was supposed to allow the export of agricultural goods from Ukraine, also includes an agreement that sanctions will not affect Russian fertilizer exports.
There is likely to be some lag between the fall in prices on world markets and the prices farmers ultimately have to pay. But cheaper fertilizers can increase farmers’ harvests.
Analysts say prices could fall further. Due to the well-filled gas reserves in Europe, several fertilizer factories could produce more again. Last year, several factories cut or paused production because of the expensive gas.
