Urea futures have been weak following the Chinese New Year holiday, with futures prices on the Zhengzhou Commodity Exchange down 7.9% since January 30th. Futures prices are also down 7.6% year on year.
Although futures have slumped, cashed prices are still up compared to last year as February sees strong demand in preparation for planting. Production was also down in January due to the holiday. Average daily production in January was 148k tons per day, a 2% decline year on year.
Cash prices for urea in the major port of Nantong in central-eastern China are up 200 yuan per ton year on year, while compound fertilizer prices are up 150 yuan per ton.
The China Agricultural Material Circulation Association reported that their index for retail urea prices was up 0.33% month on month and up 4.56% year on year. Similar trends were seen in the retail compound fertilizer price index which was up 0.06% month on month and up 5.42% year on year.
Monoammonium phosphate (MAP) and diammonium phosphate (DAP) are also seeing stronger demand. MAP prices are at 3300 yuan per ton ($486 USD/ton), up about 10% year on year. DAP prices are at 3800 yuan per ton ($560 USD/ton), up about 8% year on year.
Logistics are also smoother this year. Last year’s pre-planting period saw significant disruptions to logistics and fertilizer supplies due to Covid-related travel restrictions. The lifting of these restrictions has meant much smoother operations and pre-stocking operations ahead of planting.