Key facts
- France announced subsidies for straight nitrogen fertilizers on July 9.
- Farmers can receive at least €50/t ($57/t) on purchases made between June 1 and September 30.
- The subsidy increases to €70/t if fertilizer costs exceed 10% of operating expenses.
- Urea prices increased to €495/t fca from approximately €460/t fca.
- UAN 30 demand saw a significant increase, with prices initially stable at €370/t fca Rouen before offers reached €380/t fca.
Demand for straight nitrogen fertilizers in France, particularly urea and UAN, increased sharply following the government's subsidy announcement on July 9. Farmers will receive at least €50/t ($57/t) on purchases of straight nitrogen fertilizers made between June 1 and September 30, rising to €70/t where fertilizer accounts for more than 10pc of operating costs.
Urea buying accelerated immediately, with prices rising to €495/t fca from around €460/t fca. Interest also strengthened for sulphur-enriched granular urea (40N+14SO3), with business reported at €460/t fca in big bags.
UAN 30 demand also surged, but prices remained initially unchanged at €370/t fca Rouen with large sales volumes reported. Some offers reached €380/t fca, while several suppliers withdrew offers pending a reassessment of market levels next week.
The impact on AN 33.5 and CAN 27 was less pronounced, but some European producers withdrew offers from the market. Market participants also expressed concern that the subsidy could further divert demand away from NPK fertilizers and ammonium sulphate, which are not covered by the support scheme.