The World Bank’s fertilizer price index remained relatively stable during the second quarter of 2024, following a 20 percent drop in the first quarter. The index is 24 percent lower than it was a year ago, primarily due to a significant decline in phosphate rock prices (-56 percent) and potassium prices (-17 percent). This broad weakness is attributed to improved production prospects driven, for the most part, by lower input costs. In the second quarter of 2024, the fertilizer affordability index (the ratio of fertilizer prices to food prices) reached its 2015-19 average level.

Although fertilizer input costs have dropped significantly from their 2022-23 peaks, they remain higher than pre-2020 levels. Key inputs for fertilizer production, which saw substantial price declines from their 2022-23 records, have shown some stability in the past two quarters. For instance, natural gas prices in Europe rose by almost 15 percent in 2024Q2 (q/q) but are still 11 percent lower than a year ago. Natural gas is the most critical cost component for nitrogen-based fertilizers. Similarly, sulfur prices are around 26 percent lower than a year ago. However, over the past four quarters, the average prices of these three inputs have been more than 30 percent higher than their 2015-19 averages.

Fertilizer affordability has returned to its pre-2019 average.Lower fertilizer prices during the past few quarters have brought the fertilizer affordability index (the ratio of fertilizer prices to food prices) close to 2015-19 levels. During the fertilizer price spike of 2022, the affordability index nearly doubled compared to its long-term average.

world bank reports

JOHN BAFFES  KALTRINA TEMAJ  JULY 08, 2024from blogs.worldbank.org/