Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Lift the sanction how effect Iran fertilizer Market?qrcode

May. 24, 2016

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May. 24, 2016
 The removal of a large number of sanctions against Iran is expected to give a boost to urea fertilizer exports out of the country, market sources said.
Over the last few years, Iranian urea manufacturers have been primarily selling to India at a discount to the Arab Gulf. This is because of sanctions in the US and Europe.
Foreign fertilizer trading companies that have so far abstained from doing business with Iranian urea producers due to sanctions are now expected to start exploring business opportunities in this market.
"Lifting of Iran sanctions should mean more sourcing options for traders, and that a broader base of traders will trade Iranian and more markets will be open to Iranian product," a Switzerland based fertilizer trader said.
While it may be some time before we see foreign players trading in Iranian urea, pricing could see an impact in the shorter term as the difference in the price of urea from Iran and the Arab Gulf is now expected to reduce.
"Well, technically it should allow Iran to sell higher and make others sell a bit cheaper," said a global urea trader.
He was referring to the discount between Iranian urea prices and the Arab Gulf over the last few years. Over the last five years, Iranian urea has on an average been $15/ton cheaper than the Arab Gulf. This is because of few supply outlets for Iranian urea.
"There will be more supply options [for Iran]. This will balance things, they [Iran] will no longer need to sell at discount to India but will compete with Arab Gulf producers," a European trader said.
However, market fundamentals will still be key. With urea prices expected to stay under pressure given an oversupplied market, it is not likely that prices in Iran will see a big jump. However, the discount that was offered on Iranian product when compared to other origins is expected to decline.
"Maybe they won’t have to sell at a discount – but they will still have to compete with other origins, so prices will have to be market level," the Switzerland-based fertilizer trader said.
But an Asia-based trader said Iran would still likely have to sell at a small discount in certain markets, like the US, Thailand and Australia. This was due to past experiences of cargo contamination and also because they would need to offer at lower levels to get into these markets which only likely look at Iranian tonnes if there was a sudden shortage from regular supply sources.
The EU has lifted all its nuclear-related economic sanctions on Iran, ending restrictions on trade, shipping and insurance. This means European companies will be able to resume business with Iran. These days our company as a most important holding in agrochemical market received to many opportunities from EU companies that it is a strong proof that there is big change in Iran market in new future!


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