Fertiliser prices have eased back over the last week, with reports of urea now being available for as low as €950/t in parts of Munster and south Leinster.

While quotes for both CAN and urea remain at inflated levels, fertiliser stocks have been slow to move. It is estimated that in the northwest, sales are 30% back on last year.

International fertiliser prices have also softened. The Profercy World Nitrogen Index last week hit the lowest level so far this year. Reports that ammonia nitrate fell by 30% in one day in US markets gave rise to hopes that the market may be correcting.

Analysts point to demand destruction as buyers are simply not willing to pay record prices.

The liquidity crunch in farming is also weighing on fertiliser demand internationally.

India was late coming to the market with a nitrogen tender in May due to ample supplies, adding to concerns that demand may be weaker than expected.

Moreover, a seasonal slowdown in fertiliser demand in Europe, and weather-related issues in the US have hit sales.

Wholesale Egyptian granular urea prices have fallen by approximately 23% in the past month from $902/t (€853/ t) to $697/t (€649/t).

However, European wholesale prices are likely to be trading higher based on natural gas prices as it is the main feedstock for nitrogen. Current European gas prices of €94/MWh place European urea production costs at approximately €750/t.

Speaking in advance of the International Fertiliser Association Annual Conference in Vienna, analysts from CRU Group forecast that medium-term (post-2023) urea prices are more likely to trade in the region of $400/t (€376/t) to $450/t (€423/t)based on medium-term gas prices of approximately €50/MWh.

Affordability is also deteriorating in both phosphate and potash markets. While wholesale phosphate prices have moderated somewhat, they remain high.

The potash market is currently significantly undersupplied as a result of sanctions against Belarus and Russia. However, demand is thought to be softening.