The latest agreement between Iran, the US and other UN nations could be a precursor to Iran becoming a regular participant in world trade, allowing it to export urea and ammonia free of sanctions. Under the initial agreement, a limited $7 billion of relief on sanctions may be seen over the next six months.
With regard to nitrogen fertilizers, Iranian ammonia and urea exports have been increasingly restricted in recent years as sanctions have tightened. Iran has been a major supplier of urea to India at low prices as it has been unable to access other markets. The eventual removal of sanctions could see the product competing freely in other markets. This would undoubtedly have an impact on the cost of Indian imports and global granular urea prices.
While eventual freedom from sanctions will impact the urea market, it would have an even greater impact on ammonia as exports have been cut in half since 2010 (to just 0.5m. tonnes) with major buyers in Asia, South Korea, Taiwan and so forth not prepared to breach
To receive a free copy of Profercy’s analysis on Iran, please click here and provide your details. The analysis was published this morning as part of the Profercy Nitrogen Service, which offers daily news, weekly analysis and monthly forecasting for global nitrogen markets.