Prices of some nitrogen fertilizers are this year to average nearly as much as they did in 2008, the peak of the last agriculture boom, boosted by a clampdown on Chinese exports, Credit Suisse said.

The investment bank raised by $27 to $493 a tonne its forecast for ammonia prices this year in the Ukrainian port of Yuzhny, which sets one of the global benchmarks for the nutrient.

That price implies a jump of nearly 40% in ammonia values year on year, to within 8% of their record high set three years ago.

And it reflects growing expectations for prices of another nitrogen-based nutrient, urea, which typically trades at a discount to ammonia, and which is seeing a steep recovery in values following a reversal early in the year under the weight of booming Chinese exports.

'Supply dried up'

Indeed, urea prices have surged by nearly one-half over the last two months, after China curtailed shipments by implementing early a seasonal jump in export duties on urea.

"Nitrogen prices have moved up across the board since our last note as Chinese supply dried up and demand remains strong," Credit Suisse said.

And Chinese exports were likely to remain depressed, potentially halving from last year's 7m tonnes, equivalent to shutting off supplies from "3-3.5 new world-scale urea plants".

"Combining this shortfall with strong demand supported by strong grain prices, no wonder the market is tight," the bank said, hiking its estimate for average urea prices this year by $63 a tonne to $401 a tonne.

'Sold out' 

The bank also lifted its estimate for phosphate prices higher by $11 a tonne to $609 a tonne, in North Africa, lifted by higher costs of phosphate rock, from which the nutrient is refined, as fertilizer groups lift output to fulfil Indian orders.

And the bank edged its forecast for the average potash price, in Vancouver, this year $4 higher to $435 a tonne, thanks to strong demand at a time when all producers bar top-ranked PotashCorp are running at full tilt.

"Most producers are simply sold out," Credit Suisse said.

As for the impact on shares, the bank restated outperform ratings on stock fertilizer groups including PotashCorp, Russia's Uralkali, Brazil's ValeFertilizantes and Norwegian nitrogen giant Yara International, for which the stock price target was lifted by NKr35.00 to NKr400.00.