The announcement of large urea purchases by India and news that U.S. sanctions on Iran would go into effect May 1, sent Gulf (New Orleans/NOLA) urea prices higher last week. The average barge price for urea increased $17 last week to $281 per ton. Since early March, the average price at NOLA has increased almost $50/ton.
It is unusual for Gulf urea prices to start trending higher at the beginning of March. A combination of domestic and international factors are driving urea prices higher. Strong demand out of India and sanctions on Iran that remove some urea supplies from the international market are contributing to higher urea prices.
Demand for urea is higher this year in the Cornbelt states as time was limited for ammonia applications.
High water levels caused shipping delays on the major inland waterways for most of the winter. In recent months, stretches of the Mississippi river have been limited to daytime navigation. Tow restrictions have also been in place, which reduced the number of barges that could be towed. All of these factors have added cost to each ton of fertilizer.
As of last Friday (4/26), the average price for urea at the Gulf was $281 per ton. The seasonal price tendency for Gulf urea has generally been weaker in the first two to three weeks of May. Excessive rains and snowfall over the last several months have resulted in logistical challenges and regional shifts in nitrogen application sources. These factors have pushed urea prices higher over the past two months. The trend higher in Gulf prices is also starting to lift prices at local retail distributors.