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Rabat – The American rating agency FitchRatings announced earlier this week revising their price outlook for fertilizers upwards due to the continuing supply constraints and the expected recovery in demand.
In its latest report, Fitch concluded that Moroccan-sourced phosphate rocks are set to average $270 per tonne at the end of 2022, up from $200 per tonne in the previous outlook.
The prices of Moroccan-sourced phosphate rocks could take a downward trajectory in 2023, Fitch indicated, adding that it expects prices to average $160 per tonne, up from $150 per tonne in the previous outlook.
While Fitch revised upwards all fertilizer products, the outlook for Ammonia prices, a key component in the production of fertilizers, has especially skyrocketed and gone from an average of $850 tonne at the end of 2022 to $1000 per tonne.
Commenting on the revised prices, Fitch explained that Ammonia prices are forecasted to reach new heights on the backdrop of high gas prices, as well as an expected recovery in demand in 2023 as supply constraints linger.
Regarding Morocco’s phosphate rocks, the American rating agency argues that the increased phosphate rock forecasts for 2022 and 2023 are due to OCP’s policy of limiting export to maintain a price premium.
The OCP policy is especially effective as the group controls more than 70% of the world’s phosphate rock reserves found in Morocco, added Fitch’s report.
While OCP limits exports to control prices, the group’s plan to increase supplies in the coming year coupled with the prospect of increased supplies from China prompted Fitch to conclude that its fertilizer prices could stabilize in 2023.
As for the outlook of global demand for fertilizers, Fitch maintains that it would rise to above 2022-levels in 2023 before returning to pre-Ukraine war levels in the US and Europe, while prices would remain high up to 2026.
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