The FOB price (Free on board: shipped at the port of origin on behalf of the seller, with freight and insurance on behalf of the importer) in the Middle East of granular urea fell yesterday, Thursday, July 14, to US$ 575 per ton, according to the investing marker.
With this, urea futures for the United States link a decline from US$ 590 per ton the day before with a clear de-escalation from its last peak, of US$ 920 on April 12.
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In addition, urea reaches levels of September 2021, long before the war between Ukraine and Russia, the latter European supplier of natural gas – the main input for the manufacture of fertilizer – catapulted prices in the global market.
However, urea is still well above the average of US$240 per ton it was marketed at before the start of the COVID-19 pandemic.
International urea price: How is it quoted?
Urea is a commodity and, as such, its price is traded on spot and futures markets in various regions where large volumes are traded. These regions include the Baltic Sea, the Black Sea, Egypt or China.
The international urea market shows differentiated price behaviors in short-term and long-term price trends. It also influences the pressure of demand in the consumption of fertilizers made by emerging countries such as China and India.
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In the short term, prices are formed based on harvest expectations and future purchases, specifically from the large producing/exporting countries. Therefore, the market for the purchase and sale of urea is very active and developed in futures prices.
In relation to the long term, the markets for the raw materials with which urea is produced are taken into account: ammonia and gaseous carbon dioxide or carbon dioxide, both obtained mainly from natural gas, oil or coal.
– The raw materials with which the industrial process begins are: air, water and natural gas. Through a series of combinations and chemical reactions, nitrogen is extracted from the air and hydrogen from the water, which forms liquid ammonia. Natural gas is burned to obtain carbon dioxide, which, together with ammonia, gives rise to urea in solution.
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