0
Home
News
Directory
E-newsletter
Magazine
Events
Data
AgReport
Subscribe
Rising fertilizer freight rates to pressure suppliers![qrcode]()
May. 26, 2020
Fertilizer freight rates on certain routes have begun to rise following a steady slide since mid-March, adding to the pressure on some phosphates suppliers' fob levels.
Freight rates to ship phosphates posted the largest weekly increase in recent months, as fuel oil bunker prices have begun to rise since hitting lows at the end of April.
It's been examined the cost of shipping in four key phosphate trade routes — three to Brazil from Morocco, US and Baltic ports, and one from Saudi Arabia to India. The average cost of freight rose by $1.25/t this week, as calculated, up from modest rises of $0.25/t in the previous two weeks.
Phosphate fertilizer suppliers' netbacks had benefited from the Covid-19 outbreak, because of the ensuing fall in trade, the collapse of energy prices and the accompanying drop in freight rates. Rates across these four routes had fallen for seven weeks in a row prior to the recent rises, from the second half of March to the end of April. The cost of shipping fell by an average of $9.50/t in those seven weeks.
But fertilizer shipments to major markets continued, despite lockdowns. Many governments designated fertilizers of strategic importance in the wake of the coronavirus outbreak, given the role they play in the food chain.
But finished phosphates freight rates began to reverse this trend at the start of May, as marine fuel prices ticked up. The price of bunker fuel, with a 0.5pc sulphur content, in Singapore — widely viewed as a benchmark of marine fuel prices (see chart) — began to pick up from the end of April, supporting freight rates.
A continued rise in freight rates could threaten suppliers' fob levels in the coming weeks, as major phosphate import markets Brazil and India seek to secure tonnage. Phosphate prices have been under pressure since the end of March, and competition is ramping up in these markets among suppliers, particularly east of Suez.
But MAP prices in Brazil increased this week to $300-308/t cfr, following a drop from the mid/high-$320s/t cfr in the second half of March. Another round of MAP purchases is expected to pick up in the coming weeks ahead of application to the safra soybean crop in September, and the window for purchases is closing. But any modest rise in cfr levels could equally be cancelled out by increasing freight rates.
Fertilizer freight rates vs bunker fuel cost $/t
[ Survey ]
Join AgroPages TOP 20 India Agrochemical Companies ranking list in FY2019-20
The ranking list of top 20 India agrochemical companies has been published by AgroPages for 7 years since FY2012-13. To understand Indian agrochemical market better and faster, we will make persistent efforts to keep on.
Top 20 Indian Agrochemical Companies in FY 2018-19: Backwards Integration, Forwards “OpenAg”
Note：
1. The list of rankings focuses only on Indian native enterprises, excluding the branches of multinational companies in India.
2. The list of rankings focuses only on the sales of pesticide products(TC & Formulation), excluding the sales of fertilizers and intermediates.
3. If you join this survey, we'll freely publish a PR news online for your company. Please contact: zorro@agropages.com
We'll offer you the Company Directory in the upcoming 2020 India Pesticide Suppliers Guide magazine once the information adopted.
Source: Argus
More from AgroNews
Change
Hot TopicSubscribe
| Subscribe Email: | * | |
| Name: | ||
| Mobile Number: | ||
Comment
0/1200
NEWSLETTER