Why the increase in the price of petroleum affects the fertilizer price?

Fertilizers are essential for any type of crop, even though plants do not require complex chemicals for its nutrition, thanks to the photosynthetic process that allows them to elaborate their own food, it is necessary the presence of some conditions in the ground, such as nitrogen, which can guarantee its ideal growth.

The main purpose of fertilizers is to supply the ground with essential nutrients that the plant can absorb in order to reach higher development and quality in the crops, as well as a higher economic income, just making a minimum investment in fertilizers.

But, what role plays petroleum when it comes to fertilizers production? And why fertilizers prices tend to rise when petroleum prices rises too? The answer is simple: the manufacture of some agrarian products, such as fertilizers, relies strongly on petroleum; for example in urea and ammonium phosphates.

Ammonium is the bedrock for producing nitrogen fertilizers, and petroleum is the raw material to produce ammonium. The most common nitrogen fertilizers are: anhydrous ammonia, urea (produced with ammonia, ammonium nitrate), ammonium sulfate (manufactured from ammonia and sulfuric acid) and calcium and ammonium nitrate or ammonium nitrate and limestone, which is the result of adding limestone CaMg (CO3)2 to ammonium nitrate.

Even tough the petroleum price tend to decrease, it’s possible that fertilizer’s price will be the same because of the high costs on shipping, most of all when it comes to importing them.

This is the case in Colombia where the 99% of the fertilizers are imported so their prices are attached to the global market. That’s the way the urea’s price, for example, is more linked to the offer and demand from the big countries that produce and consume.

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