Fertilizer prices soar as production lines pause amid reduced natgas supplies

Cairo – June 27, 2024: Following two major fertilizer companies’ suspension of operations in the past few weeks, fertilizer prices have surged and may have an impact on agricultural commodity prices in the coming days.

Two of Egypt’s largest fertilizer companies - State-owned Misr Fertilizers Production Company (MOPCO) and Abu Qir Fertilizers and Chemicals Industries Company (ABUK) - recently suspended production due to natural gas (natgas) shortages.  

Talk show host, Ahmed Moussa, revealed last night that urea – a type of fertilizer - prices have recently soared to LE 700-800 per bag, from LE 250-300.

Agriculture Ministry advisor Mohamed Fahim called up Moussa, explaining that the current spike in prices is temporary and will stabilize once fertilizer production is back on track.

Earlier on the same day, Asharq Business cited several sources as saying that fertilizer prices have surged around 54 percent month-on-month in June so far, jumping from LE 13k per ton to LE 20k per ton.

Head of the Farmers Syndicate, Hussein Abdel-Rahman, recently told media that they expect a 25 percent in summer agriculture crop prices, including fruits and vegetables, due to the shortage of fertilizers.

Fahim seemingly responded to this during his talk with Moussa, noting that while there is a shortage in the local market, it has yet to affect agricultural operations due to reserves of subsidized fertilizers.

In early June, the Ministry of Petroleum tightened natgas supplies to energy-intensive fertilizer companies by 20-30 percent to conserve natgas for electricity production.

The decision was also attributed to the LE’s depreciation against the USD, leading to increased costs of production as the country imports natgas for fertilizer production.