Must-know: Compassionate nitrogenous fertilizer prices (Part 6 of 6)
(Continued from Allotment 5)
Urea allowance over ammonia
The antecedent allotment of this alternation showed that from 2004 to 2011, the boilerplate demand-driven allowance for urea was about $75 per ton. Investors should agenda that in a demand-driven market, urea tends to command a allowance over ammonia back ammonia can’t be calmly transported and bodies are accommodating to pay more.
Ammonia sets the amount floor
Because urea is produced out of ammonia, ammonia sets the amount floor for urea. If urea amount drops beneath the floor, added ammonia will be offered and beneath urea will be sold. But in a demand-driven market, not every nitrogenous fertilizer ambassador has the accommodation to aftermath urea. So a exceptional is absorbed to urea products.
Grain sets the beam for urea
What sets the beam amount of urea, though, depends on atom prices. According to Yara International, changes in atom prices (corn or wheat) explain about 50% of movements in urea price. The blueprint aloft shows a almost able accord amid the two. Back blah prices rise, urea prices tend to rise, and back blah prices fall, so do urea prices. Allotment of this is due to changes in appeal for fertilizers as farmers accomplish decisions to bulb how abounding acreage of crops aing year. The added allotment is due to sentiment, prosperity, prospects, and expectations—which we mentioned in the antecedent article.
Correlation and causation
While abiding atom prices accept apparent a able alternation with fertilizer prices, it’s important to apperceive that alternation does not betoken causation. Crop prices themselves are afflicted by factors like the U.S. dollar, bread-and-er advance in arising markets (which plays an important role in individuals’ disposable assets and appeal for food), and weather. Without an compassionate of factors that affect crop prices, it would be difficult to codify a appearance on approaching crop prices and appeal for nitrogenous fertilizers.
A few of these indicators can be begin at Bazaar Realist’s Industry Pages.
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Seven Ingenious Ways You Can Do With Urea Price Chart | Urea Price Chart – urea price chart
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