Soaring fertilizer prices tumbled this week

Soaring fertilizer prices that have helped drive up food inflation finally tumbled this week, but the reprieve may be short-lived.

The Green Markets North American Fertilizer Price Index fell 12% on Friday, the most since 2009. Prices for urea, a type of nitrogen fertilizer, swung wildly. They rose and fell by more than $100 per short ton every day this week as the market tried to assess prospects for spring demand and natural gas came off highs in Europe, said Alexis Maxwell, an analyst at Green Markets.

Fertilizer prices have soared to repeated records over the last few months, spurred by setbacks including an energy crunch in Europe, unexpected plant closures and halted exports from major suppliers. The increase has stoked concerns over prospects for further food inflation at a time when consumers are already paying more for staples like grains and coffee.

This week’s drop isn’t a sign that high fertilizer prices will continue to ease, Maxwell said in an email.

“Major producers like the Middle East and Egypt are sold out of urea through February and much of Europe remains shut-- so those looking for tons will have to search far afield,” she said. “China, the best option for spare supply, remains out of the market on an export ban that runs until May.”