- Email: Info@jinjiangmelamine.com
Menu
Urea is a nitrogen-based fertilizer often used in agriculture. Urea price is affected by different factors such as the demand for food, natural gas, energy expenses including ethanol gasoline, exchange rates of currencies, quotas of China urea market and global market trends.
Understanding these factors and their interactions is critical for agricultural industry stakeholders, including farmers, fertilizer manufacturers, traders, and policymakers, to anticipate and respond to changes in urea prices.
Below are some of the important variables that affect global urea prices：
For the urea industry, the biggest external change in the past two years has been the sharp increase in coal prices, while gas prices have remained at the bottom. However, except for China’s coal-head production capacity, the world’s gas-head production capacity is basically the same. Therefore, China has basically lost the cost of exports advantage.
However, the price of natural gas hub will rise sharply in the future, and the cost will drive the price increase of urea. Foreign gas head production capacity except the Middle East and North America will lose its cost advantage compared to my country’s coal head urea, and the corresponding export demand will also significantly improve.
The growth rate of food demand brought by the demographic dividend is higher than the population growth rate, driving the consumption of agricultural urea. Since the new population is mainly concentrated in developing countries with a small base of per capita food consumption, and the economic level of these areas is rapidly improving, the growth rate of global demand for food is also higher than the population growth rate.
The gradual rise and promotion of renewable energy sources such as ethanol and gasoline around the world will also be a new engine for the growth of global food production. In the medium term, the vigorous promotion of ethanol gasoline in my country will further promote the destocking of corn, lead to a recovery in grain prices, and promote the recovery of urea demand.
As the world’s largest producer and exporter of urea, China plays a huge role in global supply and pricing. Late last year, China reduced its urea export quota to curb overseas sales and prioritise domestic agricultural demand. This unexpected policy change led to a spike in international urea prices as other suppliers struggled to fill the supply gap left by China. Quotas are expected to remain restricted, maintaining upward pressure on prices.
Urea is a globally traded commodity and currency exchange rates affect its price. Fluctuations in exchange rates between urea producing and consuming countries can have a direct impact on import and export costs.
Changes in the value of currencies may lead to price volatility in the international urea market. Currency Exchange Rates: Global urea commerce may be affected by currency exchange rates.
The cost of importing or exporting urea from different countries may be affected by changes in exchange rates because urea price in world market in U.S. dollars on the international market. If the local currency is strong, it may be cheaper to import urea, while the opposite is true if the local currency is weak.
The dynamics of trade patterns in the world market have an impact on urea pricing. Changes in global supply and demand, the impact of trade agreements, trade disputes and geopolitical events, changes in agricultural practices, crop patterns and weather conditions can affect demand for urea, which can have an impact on prices.
Understanding these factors can help industry participants and consumers better understand and navigate the urea market. By analysing these causes of urea price changes, stakeholders can make informed decisions and respond effectively to market volatility.
JINGJIANG MELAMINE POWDER
© JINJIANG MELAMINE