Weak demand puts pressure on urea prices.

Weakened global demand has once again put pressure on urea prices at Brazilian ports. According to an analysis by the consulting firm StoneX, fertilizer prices have fallen by 14% in the last four weeks, with indications already below US$700 per ton.

According to Tomás Pernías, Market Intelligence analyst at the company, the downward trend is directly linked to reduced purchases in several countries, including Brazil. Despite this, prices still remain approximately 43% above levels recorded before the start of the conflict in the Middle East.

The consultancy highlights that, although the market is undergoing a correction, deeper declines tend to be limited by current global supply conditions. This is because the international flow of nitrogen fertilizers continues to be impacted by geopolitical developments, especially by logistical constraints associated with the conflict and the situation in the Strait of Hormuz.

Even with the recent price decline, trading volume remains low in the international market. According to StoneX, the terms of trade continue to be among the most unfavorable in recent years, which reduces the incentive for new acquisitions. Furthermore, the still high price levels keep buyers cautious and inclined to postpone negotiations.

In Brazil, this waiting strategy still has room in the short term, since the seasonal peak for nitrogen fertilizer purchases usually occurs in the second half of the year. Even so, the consultancy believes that the postponement should not be prolonged indefinitely.

"In the coming months, domestic buyers are expected to return to the market, either to replenish stocks or to secure supplies for upcoming applications," the analyst points out.

According to StoneX's assessment, the recent drop in prices has not yet created the scenario expected by buyers who chose to postpone negotiations since the beginning of the conflict in the Middle East.