Fertilizer year (FY) 1999 was a rather dismal year for the fertilizer industry. The relatively weak performance within the sector was due to lower domestic demand combined with sharply lower nitrogen prices. Although official estimates will not be available until after the first of the year, total nutrient demand is estimated to have declined by 5.3 percent. Phosphate and potash demand were particularly disappointing with both nutrients declining by an estimated 7 percent.

On the price side, phosphate and potash prices remained relatively stable throughout most of the fertilizer year despite the lower domestic demand. Nitrogen prices, however, continued to spiral downward. Gulf ammonia prices, for example, averaged only $109 per ton for the year compared to $143 in FY98 and $196 in FY97. Urea prices also continued on a downward track during FY99 with Gulf prices averaging just under $100 per ton – the lowest level since the late 1980s and more than $90 per ton below the average of just 3 years ago.