World fertilizer prices soar as food and fuel economies merge

Global fertilizer prices rose more than 200% in 2007 as farmers applied more fertilizer to maximize production of corn -- now used for ethanol -- at record prices; hardest hit are African farmers who need fertilizer to replenish nutrient-depleted soils

The IFDC Market Information Unit conducts systematic data and information studies of the global fertilizer industry. Left to right are Dr. Balu Bumb, leader of the IFDC Policy, Trade, and... Click here for more information.

World fertilizer prices rose steadily from 2004 through 2006—then soared in 2007. Food prices also rose sharply. Reasons include new demands for food crops, especially corn (or maize), for ethanol and other biofuels, increased energy and freight prices, higher demand for grain-fed meat in the emerging economies of China, India, and Brazil, and increased use of natural gas as liquefied natural gas (LNG), says Dr. Balu Bumb, leader of the Policy, Trade, and Markets Program of IFDC—An International Center for Soil Fertility and Agricultural Development.

“Farmers in industrialized countries are applying high levels of fertilizers to maximize harvests of grain at the highest prices ever,” Bumb says. “Those forces drive fertilizer prices higher.”

The highest price rise in 2007 was for diammonium phosphate (DAP). The U.S. Gulf price for DAP was about $252 per ton in January 2007—but had almost tripled a year later, rising to $752 by January 2008.

Monthly averages of fertilizer prices from 2000 to 2008. World fertilizer prices -- especially diammonium phosphate -- have skyrocketed during 2007. FOB = Free on board. Average price, with supplier... Click here for more information.

Similarly, the Arab Gulf price of prilled urea rose from $272 to $415 per ton in the same period, and the Vancouver price of muriate of potash (MOP) rose from $172 to $352.