Stone X analyst names factors that will reduce prices for phosphorus fertilizers

Spot phosphate prices in New Orleans hit a record high last week compared to corn prices. Josh Linville, vice president of fertilizers at Stone X, said the fertilizer-to-corn ratio was 184, a record high based on his data. Prices have eased slightly over the week, but are still near the record.

Today’s numbers are close to the worst ratio seen in 2008 for this time of year. They are less than 5 points away from the worst, the analyst said.

Overall, fertilizer prices today make up 40% of farmers’ production costs. Phosphorus prices have been rising faster than nitrogen and potash. Even though nitrogen and potash are applied at higher rates, phosphorus plays a major role in increasing crop yields, so its high price is the most concerning.

What factors in the global market can make phosphorus prices less “terrible”, according to an expert?

China may return to the global fertilizer market

Since the end of 2024, the country has stopped exporting phosphorus fertilizers. Before the COVID-19 pandemic, China supplied up to 8 million tons of fertilizers to the world market. And in 2023, the country was the second largest exporter of phosphorus fertilizers in the world.

We have information that China is considering an annual export quota of 4.5 million tons. The country’s government is acting in its own interests. But the country’s refusal to participate in the global market is harmful to all farmers, including in the United States, who have to deal with the resulting instability, says Linville.

Peace agreement between Russia and Ukraine

Although not directly related to phosphorus, ending the war between Russia and Ukraine would be the first step to making the nitrogen market more “normal”. Russia is the world’s largest exporter of urea and ammonium nitrate. If we see stable trade flows after the peace agreement, then the world market may return to normal distribution and supply of products, which could have a positive impact on the global agricultural sector, the expert added.

Tags: prices, fertilizers