Potash
Overview
The potash market has been disrupted from its traditional trade flows and typically slow-moving price cycles, affected by new entrants, new mines, military conflicts and political tensions in countries that either produce or consume some of the largest quantities of potash in the world. The need for accurate insight and data is more acute than ever.
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Latest potash news
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Canadian rail workers vote to launch strike: Correction
Canadian rail workers vote to launch strike: Correction
Corrects movement of grain loadings from a year earlier in final paragraph. Washington, 2 May (Argus) — Workers at the two major Canadian railroads could go on strike as soon as 22 May now that members of the Teamsters Canada Rail Conference (TCRC) have authorized a strike, potentially causing widespread disruption to shipments of commodities such as crude, coal and grain. A strike could disrupt rail traffic not only in Canada but also in the US and Mexico because trains would not be able to leave, nor could shipments enter into Canada. This labor action could be far more impactful than recent strikes because it would affect Canadian National (CN) and Canadian Pacific Kansas City (CPKC) at the same time. Union members at Canadian railroads have gone on strike individually in the past, which has left one of the two carriers to continue operating and handle some of their competitor's freight. But TCRC members completed a vote yesterday about whether to initiate a strike action at each carrier. The union represents about 9,300 workers employed at the two railroads. Roughly 98pc of union members that participated voted in favor of a strike beginning as early as 22 May, the union said. The union said talks are at an impasse. "After six months of negotiations with both companies, we are no closer to reaching a settlement than when we first began, TCRC president Paul Boucher said. Boucher warned that "a simultaneous work stoppage at both CN and CPKC would disrupt supply chains on a scale Canada has likely never experienced." He added that the union does not want to provoke a rail crisis and wants to avoid a work stoppage. The union has argued that the railroads' proposals would harm safety practices. It has also sought an improved work-life balance. But CN and CPKC said the union continues to reject their proposals. CPKC "is committed to negotiating in good faith and responding to our employees' desire for higher pay and improved work-life balance, while respecting the best interests of all our railroaders, their families, our customers, and the North American economy." CN said it wants a contract that addresses the work life balance and productivity, benefiting the company and employees. But even when CN "proposed a solution that would not touch duty-rest rules, the union has rejected it," the railroad said. Canadian commodity volume has fallen this year with only rail shipments of chemicals, petroleum and petroleum products, and non-metallic minerals rising, Association of American Railroads (AAR) data show. Volume data includes cars loaded in the US by Canadian carriers. Coal traffic dropped by 11pc during the 17 weeks ended on 27 April compared with a year earlier, AAR data show. Loadings of motor vehicles and parts have fallen by 5.2pc. CN and CPKC grain loadings fell by 4.3pc from a year earlier, while shipment of farm products and food fell by 9.3pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil potash project in Amazonas receives license
Brazil potash project in Amazonas receives license
Sao Paulo, 9 April (Argus) — Amazonas state's environmental agency Ipaam issued an environmental license to install Potassio do Brasil's Autazes project. Valid for three years, the license authorizes the construction of the complex, including an 800-meter deep mine. Ipaam granted a preliminary license to Potassio do Brasil in 2015, which is a subsidiary of Canadian firm Brazil Potash. But a state court suspended the license in September 2023, ruling that it should have been granted by the federal environment watchdog Ibama instead, following allegations submitted by a public civil suit. Amazonas state's federal regional court overruled the suspension in October 2023 under the argument that the mine is not in an indigenous territory. The installation license comes with 26 restrictions/conditions, including the protection of the fauna, maintaining preserved areas, a report of activities every six months and suspension of activities any type of archeological, historical, or artistic vestiges are verified. The company projects to invest around $2.5bn in the project, with the construction phase set to last around four and a half years. Potassio do Brasil also plans to build a port in Autazes city to ship the mineral. The Autazes project is scheduled to initially produce 2.2mn metric tonnes (t)/yr of potash. That is Brazil's main potash project and is considered the most promising to reduce the country's dependency on imports under the national fertilizer plan. The project is expected to provide around 20pc of Brazil's potash requirements. The national fertilizer plan aims to reduce the share of fertilizer coming from imports to around 40pc by 2050, down from nearly 85pc. Brazil currently imports more than 95pc of its potash needs. By Gisele Augusto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fertilizer affordability weakens in 1Q24 on higher N, P
Fertilizer affordability weakens in 1Q24 on higher N, P
London, 25 March (Argus) — Global fertilizer product affordability trended lower through most of the first quarter of 2024, as crop prices slid on higher expected global supplies, while nitrogen and phosphate fertilizers remained at high levels before coming under pressure in the second half of March. The decline in nutrient affordability this quarter comes at a time when farmers start preparing for the spring fertilizer application season in the northern hemisphere. The Argus fertilizer affordability index — a global assessment calculated using the ratio between the fertilizer and crop price index — fell to the lowest quarterly average since the fourth quarter of 2022. Nutrient affordability weakened by 10 percentage points since the start of the year, to 1.03 points in March from 1.13 points in January. An affordability index above 1 indicates that fertilizers are more affordable compared with the base year, which was set in 2004, while below 1 indicates lower nutrient affordability. High urea, phosphate prices weigh on affordability The fertilizer index — which includes international prices for urea, DAP and potash adjusted by global usage — has reached the highest quarter average since 1Q23, owing to high urea and phosphate prices. Urea prices surged through the second half of January, following a bearish end to 2023, initially spurred by short-covering and fresh demand from European markets in the wake of an Indian purchase tender. Levels out of Egypt jumped by around $70/t through the month to over $400/t fob for European markets. Prices remained firm through the first half of February, supported by strong demand from Australia and Thailand, as importers warily eyed rising prices. The supply-demand balance east of Suez was also tightened by plant closures in Iran and Malaysia, as well as restrictions on Indonesian shipments prior to the elections on 14 February. But a return of urea supply east of Suez, a slowdown in buying and weaker gas prices pressured urea levels through the second half of February and into March across most markets, apart from the US, resulting in prices to weaken on the month. For phosphates, DAP/MAP prices remained high on tight supply through the first quarter, while China refrained from exporting product. Also strong demand in Australia and the US diverted cargoes away from other markets. Limited MAP supply and emerging demand encouraged suppliers to raise their offers in March in the west. Meanwhile, in the east, the imminent reopening of China is adding to expected supply, and has turned DAP markets bearish. Traders have started to short Chinese DAP with India's RCF awarding its latest buy tender at $575/t cfr — $20/t lower than the last reported cfr sale into India. But for now, prices remain far above the breakeven price of around $509/t cfr, given the reduced Indian DAP subsidy of 21,676 rupees/t for the April-September kharif season. Crop prices under pressure High fertilizer prices so far in the quarter coincided with a decline in grain prices for wheat, corn and soybeans owing to expectations of higher global supplies in the coming season. This has led to the crop price index — the key element of the affordability index — falling to its lowest point since the fourth quarter of 2020. Global wheat output is forecast to reach 799mn t in the 2024-25 season (July-June), according to the International Grains Council (IGC), up by 10mn t from the IGC's 2023-24 projection, but consumption is expected to be flat on the previous season. Global corn production is also expected to rise in 2024-25, up by 6mn t on the year to 1.233bn t in 2024-25. And global corn consumption is forecast to increase, up by 18mn t to 1.23bn t in 2024-25. Carryover corn stocks for major exporters are set to increase by 7mn t on the year to 78mn t, according to the IGC. As for soybeans, the IGC forecasts global production to rise by 23mn t to 413mn t in 2024-25 because of larger acreages and improved yields. Global consumption is projected to rise by 21mn t on the year to 404mn t, according to the IGC. The council also expects higher carryover stocks at 75mn t in 2024-25, up by 9mn t on the year. By Lili Minton, Harry Minihan and Tom Hampson Global Fertilizer Affordability Index (points) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's 2024 grain, ferts freights unusually low
Brazil's 2024 grain, ferts freights unusually low
Sao Paulo, 22 March (Argus) — The slow pace of farmer selling for Brazil's 2023-24 soybean crop and lower liquidity in the fertilizer market have contributed to lower demand for transport services in early 2024, also raising concerns about a possible logistical bottleneck. Demand to transport grains in Brazil usually peaks in the first quarter — increasing freight rates — because of the soybean crop harvest. Works in the current cycle have proceeded at a satisfactory pace, despite climatic problems brought by the El Nino weather phenomenon. The harvest in Mato Grosso state — Brazil's largest oilseed producer — reached 95.6pc of planted areas by the week ended 15 March, only 0.9 of a percentage point below the previous harvest and 0.6 of a percentage point below the five-year average for the period, according to the state's institute of agricultural economy Imea. But crop sales have been slow. Farmers in Mato Grosso sold 46.3pc of the 2023-24 soybean crop by early March, 5.9 percentage points less than in the previous crop and 19 points behind the five-year average for the period, according to Imea. Lower oilseed prices in the international market have encouraged producers to slow the pace of sales. As a result, grain freight rates during harvest time fell — which is unusual for this time of year — on lower demand for transportation services. Freight rates on the Sorriso-Rondonopolis route, bound for the rail terminal in Rondonopolis, reached R153/metric tonne ($31/t) in the first week of March, from R200/t in the same period in 2023. In the corridors towards Miritituba, in Para state, via the BR-163 highway to the waterway transshipment point, the Sorriso-Miritituba route was at R253/t in early March, from R315/t last year. The Querencia-Palmeirante route, to Tocantins state and then via rail to the port of Itaqui in Maranhao state, reached R260/t in early March, from R335/t last year. The Rondonopolis-Paranagua route, bound south, was at R338/t in the beginning of March, down from R390/t in the same period in 2023. Demand for fertilizer freights was also unusually lower in the first quarter. At this time of year, farmers typically receive large volumes of fertilizers to attend to their soybean harvest and corn planting activities. But the purchase of inputs was also delayed as farmers postponed crop sales. With lower liquidity in the nutrient market, demand for transportation services was also lower. In Paranagua, freight rates to Rondonopolis reached R234/t in early March, from R276/t in 2023. Freight costs to Sorriso stood at R318/t, from R348/t in 2023. Freight demand for routes originating in the Santos and Cubatao ports, in Sao Paulo state, and bound to Mato Grosso, was also lower. Freight rates to Sorriso reached R365/t in March, from R385/t a year earlier. Costs to Rondonopolis stood at R255/t in the period, from R280/t a year prior. In the Northern Arc, trends on routes from Sao Luis, at Itaqui, were similar. The Sao Luis-Querencia route reached R260/t, from R336/t in the same period in 2023. The Sao Luis-Porto Nacional stretch stood at R202/t, from R249/t last year. This scenario concerns market participants, as it could create a logistical bottleneck. Soybeans will need to be shipped for exports eventually. In parallel, fertilizers arriving in Brazilian ports will have to be delivered to the domestic market. That could lead to increased competition for trucks and a significant increase in freight rates, as well as longer queues at ports for loading and unloading ships, raising the logistics costs. By João Petrini Grain freight rates - Rondonopolis-Paranagua R/t Fertilizer freight rate - Sao Luis-Porto Nacional R/t Fertilizer freight rate - Paranagua-Rondonopolis R/t Grain freight rates - Sinop-Miritituba R/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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