Fertilizer prices, which had hit record highs, are now going down again as buyers recover from the shock, but that doesn't mean the market contraction is over. Despite this decline, ammonia prices are still 87% higher than a year ago.
Wholesale prices for another type of nitrogenous fertilizer, urea, dropped nearly 8% on Friday, the 27th of May, in New Orleans, US, to $585 a short ton. But retail prices are still nearly double, at $1.030 a short ton. The June spot price in Tampa, Florida, for ammonia nitrogenous fertilizer, settled at $1.000 per metric ton, down 30% from $1.425 in May, according to Green Markets.
However, despite this decline, ammonia prices are still 87% higher than a year ago, and supply chain issues continue to wreak havoc on global markets.
A heavy drop in demand is responsible for part of the decline. In places like Southeast Asia, buyers are unwilling to pay record ammonia prices in April and May. In addition, it reflects the decline in the cost of ammonia production as natural gas prices in Europe fell in the second quarter.