Natural gas shortage drives 54 percent surge in Egyptian fertilizer prices

Fertilizer prices in the Egyptian open market have increased by around 54 percent month-on-month (MoM) in June, reaching up to EGP20,000 per ton ($416.57), compared to EGP13,000 ($270.83) per ton previously, according to a government official and six sources familiar with the matter. 

Factors contributing to price hike

The rise in the country’s fertilizer prices has been attributed to a decrease in locally produced natural gas, which has significantly impacted factory operations and resulted in an inability to meet the increased demand for fertilizers for summer crops, as stated by four heads of fertilizer production firms.

Need for LNG imports

Meanwhile, the government official cited the need for Egypt to import liquefied natural gas (LNG) to run its fertilizer plants as a contributing factor to the price increase. This was further exacerbated by the rise in the exchange rate of the US dollar against the Egyptian pound, leading to an increase in the costs of production inputs.

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Production halted at major fertilizer company

In light of these developments, on June 25th, the Abu Qir Fertilizers and Chemicals Industries Company (ABUK) suspended operations at its three factories due to a cut in natural gas.