Global potash fertilizer prices have risen sharply, and there is still no sign of stopping the rise

In early June, the price of potassium chloride rose further, and the net income of potash fertilizer producers increased as a result.

In other respects, the Ministry of Agriculture of Bangladesh ended the delayed 200,000 tons of standard potassium chloride bidding on June 3. The lowest 12 bids totaled 218,000 tons, and the transaction volume of 2 to 30,000 tons was 333 to 358 US dollars/ton CFR. As of June 10, the average price of spot potassium chloride in Brazil was as high as US$435-450/ton CFR, the price of standard potassium chloride in Southeast Asia rose to US$290-310/ton CFR, and the price of large-particle potassium chloride products was US$310-330 /Ton CFR.
In terms of freight rates, there is a mixed picture, with some routes experiencing a slight drop in freight rates, while others have increased. The freight rate from the Red Sea to China rose by US$10/ton, while the freight rate from the Red Sea to Southeast Asia rose by US$6/ton. The quotation of standard potassium chloride in Vancouver was US$207-253/ton FOB, and the quotation of large-particle potassium chloride rose to US$251-387/ton FOB. Due to the increase in freight and the price of standard potassium chloride in Southeast Asia, the price of standard potassium chloride in the Baltic Sea has risen to US$184~249/ton FOB. This is the first time since October 2013 that the FOB price of large particles of potassium chloride in the Baltic Sea has reached US$400/ The high position of tons FOB.
Although the global potash fertilizer price has risen fiercely recently, there is still no sign of stopping the increase. It is expected that the global benchmark potash fertilizer price will further rise in the short term. The speculation that Belarus will be sanctioned has heated bullish sentiment and the market balance may be broken.
It is currently expected that a new round of potash fertilizer contracts in China will be signed in the fourth quarter of this year, and the price may be much higher than expected, possibly reaching US$330/ton CFR.
American market
Affected by the news of Canada’s closure of mines and possible sanctions against Belarus, the price of large-particle potassium chloride barges at Nora Port in the United States has risen significantly, quoting as high as $418/short ton FOB, and prices are expected to continue to rise.
The price of large granular potash fertilizer in the southern plains of the United States and the Mississippi Delta has risen to $460/short ton FOB. Because of threats to supplies in the United States in summer, retailers are willing to pay higher costs. In the previous week, the southern potash fertilizer price range was only US$410~415/short ton FOB.
The retail price of large-particle potash fertilizer in the central and western regions rose by US$20/short ton in a week to US$450/short ton FOB.
Canadian market

Recently, Nutrien of Canada issued a statement on its official website stating that in response to strong market demand, it plans to increase potash output by approximately 500,000 tons in the second half of this year compared to previous expectations. In the future, it will hire more employees to put into production and increase the output of most of its potash mines, especially the output of Vanscoy. According to Nutrien's latest annual report, Vanscoy's current effective production capacity of potassium chloride is about 800,000 tons/year, but the mine's rated production capacity is 3 million tons/year, and its output has reached 2.8 million tons/year in the past. After PotashCorp and Agrium merged into Nutrien, the company has been reducing Vanscoy's effective production capacity due to cost reasons. In addition, Mosaic of Canada announced that due to the recent acceleration of saltwater flow, it will immediately close its Esterhazy K1 and K2 mines in Saskatchewan. It is expected that its overall potassium chloride production will therefore be reduced by approximately 1 million tons between July 2021 and March 2022. However, the increase in production from the Vanscoy mine in Nutrien and the Colonsay mine in Mosaic may offset the reduction in Esterhazy's production.
According to HIS Markit trade data, Canadian potassium chloride exports in April fell 14% year-on-year to 1.88 million tons, and exports in the first four months of 2021 fell 5% to 6.82 million tons. The quantity of potassium chloride exported to the United States from January to April was 3.59 million tons, a year-on-year decrease of 3%. Among them, the number of re-exports through Portland, Oregon was 592,092 tons, 47% lower than the same period in 2020. From January to April, Canada exported 692,743 tons of potassium chloride to China, a year-on-year increase of 12%. Exports to Indonesia increased by 32% to 663,190 tons, while exports to Brazil fell by 30% to 661,191 tons. In addition, the volume of exports to Malaysia increased slightly by 3% year-on-year to 298,895 tons. Other destinations include Belgium (142,823 tons), Australia (111,552 tons), and Thailand (105,378 tons). Canadian exporter Canpotex recently stated that due to continued strong market demand, the company has fully invested in potash sales in September.
Brazil market
The quotation of large particles of potassium chloride in Brazil has soared to US$460/ton CFR. Market sources said that the EU is expected to impose sanctions on Belarus on June 21, and the US government has also participated in the EU's discussions on sanctions, which will affect the supply of potash products in Belarus. In addition, due to tight supply and unusually strong soybean prices, the price of large particles of potassium chloride in Brazil has steadily increased, reaching the highest level since the beginning of 2013, and has also risen by about US$100/ton since the end of April. From January to April this year, Brazil imported more than 4 million tons of potassium chloride, reaching 4.03 million tons, breaking the 2020 record of 3.64 million tons, an increase of 11% year-on-year.
Indian market
According to the latest data from the Department of Fertilizers (DoF), India’s national potassium chloride inventory has fallen to 1.44 million tons, the lowest point in the past two years. The monsoon rains in the Khalif monsoon this year are normal and slightly better than in previous years, and potash consumption is about to start.