2022 was a turbulent year for the fertilizer market. Prices rallied to record highs following Russia’s invasion of Ukraine, with the market fearful of drastic supply shortfalls. But producers, farmers and policymakers responded with ramped-up output, application cuts and softer sanctions respectively.
Prices consequently end 2022 significantly lower than the March peak. But a volatile trajectory is expected to remain in 2023. European nitrogen production will continue to be plagued by high gas prices. But government support and ample supply from elsewhere will see prices decouple from marginal costs. Demand is set to recover, albeit modestly.
The momentum behind low-emissions ammonia will continue, and supply-side subsidies may be more forthcoming in response to the US inflation reduction act. CRU Fertilizers top ten calls of 2023 provide a high-level overview of the direction and trends in this important market.
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