Surge in global fertiliser price sparks fear for Thai agriculture
The surging price of fertiliser since Russia cut off supplies is taking a toll on Thailand, business-news outlet Thansettakij reports.
Thai wholesalers are now stockpiling fertiliser over fears of a prolonged Ukraine-Russia conflict, while China is already ordering its fertiliser factories in Laos to return their products, Thansettakij reported on Sunday.
The moves come after Russian President Vladimir Putin suspended exports of fertiliser, tightening global supply and raising prices.
Russia provided 8 per cent of Thailand’s imported fertiliser in 2021, shipping 4.45 tonnes worth Bt5.67 billion to feed the Kingdom’s agricultural sector.
The price of single-nutrient fertilisers began surging three days after Russia invade Ukraine on February 24.
The price of urea fertiliser hit US$950 per tonne last week while the price for April delivery rose above $1,000 per tonne.
Russia is among the world’s top exporters of urea fertiliser.
Meanwhile the soaring price of gas needed in fertiliser manufacturing is driving up prices of urea and nitrogen fertiliser.
Russia is also a top exporter of diammonium phosphate (DAP) fertiliser, supplies of which will be affected by the war.
Adding to market turmoil is uncertainty over China’s exports as demand increases all over the world, Thansettakij said.
The market for Muriate of Potash (MOP) fertilisers is also under pressure from sanctions against Russia as well as uncertainty over Belarus exports.
A source said supply of chemical fertilisers in Thailand is likely to be insufficient and the price of every formula may increase. Wholesalers are stockpiling fertilisers from factories to sell to farmers, the source added.
Meanwhile importers are not ordering more fertiliser as they cannot earn a profit at the price levels set by the Commerce Ministry. As the price rises, farmers will use less fertiliser, which will reduce their yields, said the source.
Recently, two Chinese fertiliser factories in Laos were ordered to send all their produce back to China. The Chinese government is reportedly worried that its 2022 GDP growth target of 5.5 per cent will be hit by fallout from the Russia-Ukraine war.
The third round of negotiations between Russia and Ukraine failed to achieve a breakthrough on March 7.
