US exports of nitrogen fertilizers rose to a multi-year high in August, finding support on higher prices in European natural gas, which raised the cost production of the crop nutrient, leading US shipments to climb.
Data on Tuesday showed that nitrogen fertilizer exports from the US surged to 370,000 short tons of nutrient in August, increasing twofold from last year’s total.
The upturn was driven by European buyers beating US buyers and other exports such as Indonesia and Malaysia.
A Global Dislocation in the US’s Nitrogen Fertilizer Supply
While exports have risen, another data showed that since June, the nitrogen fertilizer supply of the world’s third-largest producer was at its second-highest in the past decade, signaling global dislocation instead of shortage.
Whether the US produced more than in July and August or redirected a bigger part of supplies to Europe has yet to be clarified.
Historically, the US is a small exporter, which limits its ability to backfill markets.
The countries with the highest year-on-year surges in US purchases are European, including France, Belgium, Norway, Lithuania, Morocco, Chile, and Brazil.
Brazil, which heavily depends on imports for 85% for its fertilizer, bought a significant amount of ammonium nitrate from the US, Belgium, and Holland, in the January-September period to even up a decline of supplies in Russia.
European countries mainly purchase their imported urea from North Africa, although they are now buying it beyond that region.
Nitrogen prices in Europe dropped in mid-October as a few domestic plants’ return to producing the crop nutrient due to lower natural gas prices.
Secretary-general of a European farming group Pekka Pesonen stated that with high prices and a supply squeeze, European farmers could not store enough fertilizer before planting next spring. He added that they are talking about the need for huge volumes over a short period.
