Prices of Caustic Potash showcased an upward trajectory in March due to increase in the demand from the fertilizer sector globally, where Caustic Potash is used in the manufacturing of liquid fertilizers. As sowing season is approaching in various countries like China, South Korea, Indonesia, fertilizer offtakes have been increasing across the Asian region. Besides, the increase in demand from the detergent sector was observed as a result of fear of resurgence of Covid 19 in various Asian countries.

The Russia-Ukraine crisis has been causing global supply disruption for agrochemicals as Ukraine and Russia are the key exporters of agricultural inputs. The war between Russia and Ukraine has impacted the global supply of agricultural inputs in India and turkey.

China has been witnessing a resurgence of Covid 19 due to which the country has imposed a Zero Covid policy. Under zero covid policy, the lockdown has been implemented in the country, where chemical plants such as Lu Bei Chemical, Shenyang Chemical have announced temporary turnarounds to restrain from mounting of inventories amidst the closure of market activities in China. The lockdown has even halted internal as well as external trading activities from China.

In line with active offtakes of caustic potash from the fertilizer industry, prices of Caustic Potash increased by 1% in China during March. China also imposed a ban in March on exports of fertilizer globally to secure its local supply. The country was heard delivering fertilizer only to the Philippines in small quantities while the supplies have been curbed for all other countries. Supply ban has widened the demand and supply gap in the global market due to the acute shortage of materials from China.

The US has announced ban on all Russian oil and gas imports under the sanctions imposed on Russia. The ban on oil imports from Russia has disrupted global shipments of Caustic Potash because of the increase in freight charges. According to the ChemAnalyst data, prices of Caustic Potash increased by 6% in the USA in March. Traders have remained anxious due to no signs of ease in supplies amid the ongoing geopolitical conflict.

As per ChemAnalyst, “the prices of Caustic Potash are expected to show an upsurge globally due to the rising energy prices as a result of ongoing geopolitical conflict”. Moreover, demand from the fertilizer sector is likely to surge due to the upcoming and ongoing sowing season in various countries in Asia.