Russia, the world’s top urea exporter, remains “still quite active” in shipments of the nutrient despite Western sanctions, Yara International said, acknowledging a decline in prices.
Dag Tore Mo, head of market intelligence at the Norwegian-based fertilizer giant, said that there was “fairly low visibility” on Russia’s urea trade thanks to moves to cut ties with the country, which have curtailed access to ports in the likes of the Baltic and Finland, to trade finance, and to some shipping companies.
“You may have seen that Russia has suspended the publications of trade statistics in general, so it makes it even more complicated to follow it,” he told investors.
‘Still quite active’
However, while “it seems like there is curtailed Russian exports… they are still quite active in exporting quite significant volumes”.
“We understand that there is some activity in the eastern part of Black Sea,” if “not very much”.
Mr Mo quoted a report that Russia’s urea exports in April fell by some 25%, adding that this estimate appeared “a little bit of speculative”.
‘Make quite a difference’
Nonetheless, with Russia typically exporting about 7m tonnes of urea a year, as “the largest contributor in the global market, these [lost] volumes make quite a difference”.
It appeared that China, another key urea exporter, if one with a history of government curbs on volumes, was not selling nitrogen fertilizers into the void.
“What we have seen recently is that they’ve exported quite a bit of phosphate, DAP in particular.”
However, China has “exported very little nitrogen” beyond politically supported shipments to the like of Pakistan, Mr Mo said, noting reports of “soft” restrictions on shipments, through measures such as cargo inspections.
“There is a consensus that these kind of soft export restrictions will continue,” he said.
Market intelligence suggests that “there is a feel that the government in China kind of thinks that local urea prices in China are close to maximum on where it should be”.
‘Softness in pricing’
Yara acknowledged a fall in nitrogen prices over the past month, despite the sanctions on Russia, although cited a seasonal downturn in demand too now that the peak order period for northern hemisphere spring applications have passed.
“It’s not unusual to see some softness in pricing at this point of the season because the main application in most markets is done,” said Thor Giaever, the Yara chief financial officer.
“So you’re very much into the phase now where the further into the quarter we get, the more this is about willingness to take positions for the new season.
