FERTILIZER PRICE COMMENTS FOR FEBRUARY 2021

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NITROGEN

Algeria
Algerian producers have raised asking prices to $395-400/t fob. AOA sold out until April, according to traders. Koch was in the freight market in the first week for a 50,000t cargo to load granular urea in Arzew in the second to third week for shipment to Wilmington, US. Sorfert asked $400/t fob against any new inquiry and reports bids in the high-$390s/t fob. It has been sold out through March. However, trader bids were reported much lower in the high-$360s/t fob to $370/t fob for March and April loading. Sellers were unlikely to accept that as it was too early yet to price. AOA has committed its urea through to mid April and indicated availability for the second half of the month. It has had one plant on turnaround and was due to resume production shortly. Traders were offering first half April tonnage at $375/t fob Arzew at the start of the third week in February but withdrew offers after US Sorfert was sold out for March, with small cargo sales to southern Europe made at prices up to $380-385/t fob and has yet to sell for April. Keytrade will load 40,000t of urea in Arzew in the first half of March and was checking freight for a vessel to Nola 6-11 March. Freight indications for the US and Brazil have risen to about $30/t. AOA has only second half April tonnage to sell and was indicating $380/t fob to traders.

East Africa
African non-profit organisation One Acre Fund has outlined its fertilizer requirements for various African countries for the 2021-22 fertilizer season. Purchase tenders would be announced to cover this demand in due course. In total, One Acre requires nearly 84,000t of fertilizers, including 24,182t of urea. The demand, by country, is as follows:

• Rwanda: for the ‘A’ season 8,708t of urea — likely tender time is March for delivery to Dar es Salaam or Mombasa,
• For the ‘B’ season 5,368t of urea — likely tender time is August with delivery again for Dar es Salaam or Mombasa.
• Tanzania: 2,896t of urea and 1,576t of CAN — likely tender time is June, also for delivery to Dar es Salaam
• Uganda: 249t of urea with likely tender time of October for delivery to Mombasa.
• Zambia: 3,163t of urea — tender time likely in July for delivery to Beira, Mozambique.
• Malawi: 3,798t of urea — likely tender time is July for delivery to Beira.

Egypt
Granular urea export prices have continued to rise, hitting a high of $380/t fob. This was the highest level achieved since October 2014. Asking prices were close to $400/t fob now. Egyptian urea producers have sold significant quantities forward for April. Excluding Fertiglobe, producers were estimated to have 100,000t of granular urea available for April loading. Granular urea sales to trading firms in the first week included:
• Mopco sold 5,000t at $380/t fob Egypt for April loading to Europe.
• Alexfert sold 15,000t at $380/t fob for April shipment to two undisclosed trading firms. The urea will ship to Europe/Turkey. The producer has just 15,000t of granular urea left for April loading. At least a third of its monthly production was heading for the domestic market
• Abu Qir was sold out through March
• Helwan has 15,000t of granular urea available for shipment during the second half of April and was asking $400/t fob
• Mopco was sold out until April and asking $400/t fob against any fresh inquiry
• Kima was out of the market as it was not expected to restart production until mid-February. There was a freight inquiry for 25,000t of granular urea from Damietta 1-15 March for shipment to Ravenna, Italy.
Nothing was sold from Egypt in the third week until a trader bought 7,000t of granular urea at a price in the high- $380s/t fob Damietta for April loading. This was below previous indications from Egyptian producers, but above previous positions taken for April loading. At press time, there were unconfirmed reports of another sale for April above $390/t fob. March positions were largely sold by traders and buyers would increasingly have to confront April pricing.
Small sales of granular urea have taken place for April shipment at up to $395/t fob, as traders start to position for the month. Traders have sold much of the urea they bought for March loading, recent sales netting from the low-$380s/t fob in Turkey to $390/t fob elsewhere. Late in the third week, Mopco sold 7,000t of granular urea at $390/t fob for second half April shipment from Damietta Helwan Fertilizer sold 5,000t of granular urea at $395/t fob. Fertiglobe sold 8-10,000t of granular urea at $395/t fob

Nigeria
Indorama has made no new export sales but reported bids for spot tonnage in the high-$380s/t fob. Its next spot availability was June with most of the output destined for the domestic market where there was strong demand. Contract shipments account for the other commitments. Indorama loaded one export cargo in February, understood to be moving to Brazil, but would export no urea in March due to strong demand from Nigerian farmers who were buying urea for storage due to healthy cash flow from grain sales. Indorama’s second urea unit was expected to start production in May. Conflicting information emerged from Dangote in the last week. A statement from the company said that the refinery and fertilizer complex at Lekki would start production in early 2022 following COVID-19 related delays to construction. However, the company’s director of projects and portfolio management also said that the first phase of the ammonia/urea project was being commissioned and could be ready as early as February.

South Africa
South African urea imports totalled 792,000t January- December 2020, down 2pc from 2019, according to GTT data. Imports from Saudi Arabia and Qatar continued to account for the majority. Imports from Saudi Arabia more than doubled to 407,000t, while Qatari urea fell by 55pc to 148,000t. Imports from Oman were higher at 107,000t, up from 51,000t in 2019. In December, South Africa imported a total of 72,000t of urea, up from the 46,000t imported in November and registered a 50pc increase year on year.

West Africa
Several tenders awarded to local participants in the fourth quarter of 2020 may face supplier backing issues, given the large rise in prices since awards were made. These tenders include those in Burkina Faso for 30,000t and the Ivory Coast for 37,000t. As a result, the market was short, with fresh demand also emerging. There was not much availability from Nigeria currently to service the west African market.

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PHOSPHATE

East Africa
No business has emerged following an enquiry by a group of importers in Kenya and Tanzania in recent weeks. The importers were looking for a total of 40,000t of DAP for shipment in the second half of February. The vessel Tiger Hebei was expected in Mombasa, Kenya, on 14 February. The vessel departed Russia’s Ust Luga port on 6 January. The shipment was originally sold in November for December shipment but was delayed because of adverse weather at the load port. A distributor was selling DAP locally at $500/t cfr.
Kenyan DAP imports from Russia, Morocco rise in 2020
Kenyan fertilizer importers increased purchases of Russian and Moroccan DAP in 2020, driving up total arrivals, latest GTT data show. Buyers in Kenya received 315,000t of DAP in 2020, up by 25pc on the year. Around 253,000t of DAP arrived in 2019. Most of last year’s imports — 205,000t came from Saudi Arabia. The kingdom’s producers have dominated Kenyan DAP imports over the past few years. Last year’s arrivals were broadly stable in 2019, falling by only 4,000t.
DAP from Saudi Arabia was offered at $490/t cfr in the second week of February, but no sales emerged by press time. A group of buyers in Kenya and Tanzania had been enquiring for a total of 40,000t of DAP for shipment in the second half of February. Several buyers in Kenya and Tanzania purchased 80,000t of DAP at $490/t cfr for shipment from Saudi Arabia in March. The sale was concluded at the same level as offers reported last week and marked an increase of $110/t from previous Saudi DAP business concluded there in December.

Egypt
No new sales have been reported and NCIC has allocated DAP cargoes until May, market participants report. NCIC was in discussions with trading firms for sales to load in May, beyond the import window for the US spring fill. The second half of February price reflects the usual discount to OCP. There were also reports of a delay to current loadings by around a week, but NCIC did not comment.

Morocco
OCP had no new sales to report in the first week of February. Market participants reported that DAP was priced at $510/t fob for April loading to Europe. But the supplier denied April-loading cargoes have been offered. Netbacks from the high-end of MAP sales in Brazil reflected the mid-$540s/t fob Jorf. A freight enquiry was circulating in the first week of February to ship 42,000t of phosphates from Jorf to Nigeria, loading 10-25 February. This was likely relating to DAP under a government-to-government deal, but was not confirmed on the sell-side.
Jorf Lasfar hit by adverse weather
The port of Jorf Lasfar, OCP’s fertilizer production hub in central Morocco, was closed because of adverse weather in the first week of February. The port closed on 1 February and reopened on 4 February.
Moroccan fertilizer exports rise slightly in January
Moroccan fertilizer producer OCP increased loadings at its Jorf Lasfar production hub in January compared with a year earlier, despite maintenance lowering output. OCP shipped 741,000t of fertilizers — DAP, MAP, TSP and NPK/NPS — in January, up from 720,000t in January 2020, Argus line-up data show. But exports fell compared with average 2020 shipments, which had been at 830,000t.
DAP was indicated in the $515-520/t fob range in the second week of February, but OCP roundly denied making offers. The producer also denied a possible DAP sale into India. Netbacks from Brazil reflected MAP prices at $560-565/t fob Jorf in the second week.
Adverse weather to close Morocco’s Jorf Lasfar port
Adverse weather led to the port closure of Jorf Lasfar in Morocco for several days, causing delays to fertilizer loadings. Unfavourable weather affected the port, where Moroccan fertilizer producer OCP operates its major production hub, until 14 February, local sources said. Argus line-up data show that only around 110,000t of finished fertilizers — DAP, MAP, TSP, NPKs and NPS — have so far left the port as at the second week of February, while further departures of over 500,000t were currently scheduled. OCP loaded around 730,000t of fertilizers in January. The company usually imports sulphur, sulphuric acid and ammonia to Jorf Lasfar and exports phosphoric acid and finished fertilizers. The port regularly had to close towards the end and at the beginning of the year, as high swells hinder loading activities.
OCP reported that it was not offering any product in the third week and had taken a step back from the market. Trading firms indicated DAP prices at around $540/t fob and above. Availability was tight and the delays at Jorf caused some consternation among market participants.
Adverse weather makes Jorf Lasfar shipments lag
Fertilizer exports from Morocco’s port of Jorf Lasfar lagged in February, following two port closures because of adverse weather. Argus line-up data show that only 260,000t of fertilizers – DAP, MAP, TSP, NPKs and NPS departed from Jorf Lasfar as of 17 February, compared with 630,000t in the same period last year. The port opened in the beginning of the third week after several days of closures. Further adverse weather was announced from 21 February, potentially limiting exports.
OCP raised its offer price for DAP into Europe notionally to $580/t fob. But this was unworkable at current fca levels and, in the light of no new sales, prices were rolled on in the third week of February. OCP sold 30,000t of MAP to Brazil, loading in April, at a price reflecting the mid-$590s/t fob, reflecting the higher freight costs in the last week of February. Output in February ranged from 800,000-850,000t of finished product, in line with OCP’s prior projections. Output was unaffected by the fire on 20 February.
Jorf Lasfar delays continue
The Atlantic port of Jorf Lasfar, where OCP operates its major fertilizer production hub, experienced further bouts of adverse weather over the past weeks in February, causing further delays to loading activities. Around 436,000t of fertilizers – DAP, MAP, NPKs, NPS, and TSP – departed the port as of 24 February, Argus line-up data show. This compares with 774,000t in the same time last year. Only around 100,000t of DAP left the port, as well as 138,000t of MAP and 24,000t of TSP.
Fire at OCP’s Jorf Lasfar, output unaffected
A fire broke out in the last week of February at the Atlantic port of Jorf Lasfar, Moroccan phosphates producer OCP’s major export hub, but the operations at the firm’s production complex were not affected. A sulphur conveyor, which transports discharging sulphur from vessels at the port to OCP’s storage and production facilities, burst into flames. OCP’s emergency team and local crews extinguished the fire quickly, the firm said. Production at the 11mn t/yr DAP/MAP/NP/NPK facility was unaffected, with operations continuing, OCP said. Sulphur discharge was not affected either, the firm added.
There were no fatalities and an investigation as to the fire’s origins was underway.

Rwanda
Not-for-profit social enterprise, One Acre, issued a tender to buy 7,731t of DAP, 6,810t of NPK 17-17-17 and 2,059t of urea for Rwanda’s 2022 season.
To distribute the product by 1 July 2021, delivery to the ports of Dar es Salaam or Mombasa was required by 15 April, to allow for bagging, transport and placement in regional warehouses. The Rwandan fertilizer import market was small — around 50,000 t/yr, Argus estimates — and 17-17-17 accounts for about 60pc of receipts. Rwanda’s main cash crops for export include tea and coffee.

Senegal
ICS has sold 15,000t of MAP to a trading firm, loading in mid- March, for likely shipment to the Americas.

Tunisia
Tunisian phosphates producer GCT has sold DAP to various Mediterranean markets in the range of $545/t to $550/t fob for loading in February, reporting a return to DAP production with its own phosphate rock. GCT has sold 4,000t to an eastern Mediterranean market at $550/t fob, which was loaded in the second half of February. The supplier has also lined up 5,000t to Turkey in the mid to high-$540s/t fob. The sale to Turkey was likely in relation to freight enquiries circulating in the third week of February of 5,000t of DAP to Iskenderun/Marmara/Izmit Bay, loading 20-25 February.
GCT had no new sales to report in the last week of February. A freight enquiry from Gabes to Nola, loading in the first week of March, did not result in a sale.

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