According to an economic modeling analysis by researchers Shawn Arita, Ming Wang, and Joseph Glauber of the International Food Policy Research Institute (IFPRI), export restrictions by major global players and subsidies in purchasing nations have the potential to accelerate their downward trajectory. By April, global urea prices had practically doubled and diammonium phosphate (DAP) prices had risen by 35% due to the blocking of 21 million tons of annual urea export capacity and 4 million tons of DAP in the Gulf region. On the supply side, the conduct of China, Russia, Egypt, and Indonesia – which together accounted for about 35% of total global exports – dictates the residual volume of inputs that reaches the international market. On the demand side, subsidy programs in India – which alone absorbs almost 20% of global urea imports – shield local producers from external price spikes, shifting the need for consumption adjustments to non-subsidized markets, such as Latin America, with an emphasis on Brazil.
Source: Agencia Estado/Nova Cana