Fertilizer Predictions for 2023: Will Nitrogen Prices Drop?
January 25, 2023 As the calendar moves from January to February, many in the ag retail world are probably wondering how the crop nutrition market will play out this upcoming growing season. According to one market watcher, 2023 could include two “returns to normal” and one “new growth opportunity” for the industry.
At the recent Illinois Fertilizer & Chemical Association annual meeting in mid-January, BK Morris, Senior Markets Editor, Fertilizers, at CRU Group, offered up several predictions for the market outlook during this growing season. This included more of the same in terms of export restrictions from China and Belarus and more environmentally-friendly fertilizer practices spreading across the U.S. and Europe. But by far his most interesting predictions involved nitrogen-based crop nutrients and new technologies.
Throughout much of 2022, one of the most talked about crop nutrients was nitrogen. Due to logistics headaches and the Russian invasion of Ukraine, nitrogen fertilizer prices quickly skyrocketed, topping more than $1,500 per ton at one point. By year-end, prices had settled back down some, and Morris expects this to remain the case for 2023.
“Nitrogen prices are expected to decline, decoupling from costs due to ample supply,” he said. “For example, urea prices are forecast at $556 per ton, down from $675 per ton in 2022.”
Helping this situation along will be a resumption of ammonia exports from Russia. During much of 2022, as the war with Ukraine was in full swing, many countries stopped doing business with Russia and the normal trade routes through parts of this region were disrupted.
“We anticipate United Nations brokered negotiations to finally break through in 2023, and Russian ammonia shipments are projected to climb from 0.8 million metric tons to 2 million metric tons,” Morris said.
Perhaps most intriguing was Morris’ final prediction for 2023, involving the fertilizer suppliers themselves. For many years prior to COVID, these companies had been looking to invest in new technologies supporting their marketplace. However, general market uncertainty kept these from taking place.
Loading ...But the time might be right for these investments to come back, Morris predicted. “2023 could be the year that fertilizer companies ‘roll the dice’ and acquire companies with patented new plant nutrition technologies.”
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