Sulfur prices rise, boosting fertilizer costs
Even higher prices coming; farmers group accuses producers of price gouging
By Tom Stundza -- Purchasing, 5/27/2008 9:31:00 AM
In only a year the price of sulfur has risen more than tenfold from $50/metric ton to $500, according to ICIS, the chemicals-pricing service. Editor Stephen Burns writes to clients today that Mideast sellers have mentioned $900/metric ton as minimum target for second-half sulfur contracts, with up to $1,000 possible. “Their position is based on higher spot prices since the start of this year and expectations that the sulfur market will strengthen even further as the year progresses,” ICIS writes.
Demand for sulfur, long an ugly yellow waste product of petroleum refining, is surging because it's needed to make sulfuric acid, which in turn is essential to the production of fertilizer. Earlier this month, Purchasing.com reported that increased demand for sulfuric acid from booming agricultural and base metals markets has pushed the raw material price of sulfur through the roof in the U.S. while the U.S. market continues to see a long-term slowdown in sulfur supply from reduced production at oil refineries.
Fertilizer prices are increasing faster than those of almost any other raw material used by farmers. According to the Wall Street Journal, in April, farmers paid 65% more for fertilizer than they did a year earlier, according to the U.S. Department of Agriculture. That compares with price increases of 43% for fuel, 30% for seeds and 3.8% for chemicals such as weed killers and insecticides over the same period, according to Agriculture Department indexes.
The price of fertilizer “defies rational explanation,” says Robert Carlson, president of the North Dakota Farmers Union, in the Journal. In a May 8 letter to North Dakota's three-member congressional delegation, he accused fertilizer companies of price gouging and asked for an investigation. He points out that the price of anhydrous ammonia, a nitrogen fertilizer, “has more than tripled over the past two years. This is a serious problem and we want to hear some explanations.”
See also: Sulfuric acid prices explode
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