EU clampdown on cheap N may mean price hike - Farmers Weekly

Subscribe and save

Farmers Weekly from £133
Saving £46
In print AND tablet

SUBSCRIBE NOW

sub_ad_img

EU clampdown on cheap N may mean price hike

Friday, 03 September, 1999

By Robert harris

FERTILISER prices could rise sharply next spring if, as expected, Brussels responds to manufacturers demands and slaps anti-dumping duties on cheap, and sometimes illegal, nitrogen imports.

The main target is material from Eastern Europe, which is undercutting EU-made product by up to 30%.

Industry sources report several strong export surges this season after the ending of voluntary tonnage ceilings, the collapse of the Russian market and continued over-capacity in the east.

Cheap imports, which accounted for almost a quarter of nitrogen sales last year, coupled with reluctant farmer buying, have kept on-farm prices for UK material at £86-£88/t this season.

While this is good news for farmers, makers claim they are struggling to make money at prices no better than last years, which were the lowest for 13 years.

Consequently, the recent imports have triggered a rash of complaints from several European manufacturers to the European Fertiliser Manufacturers Association, which is pushing Brussels to investigate the problem.

Most nitrogen has come from Poland, either as liquid urea/ammonium nitrate mix or solid AN.

“The Polish industry is about to privatise, so it has to prove it can make money,” says one source. Georgia and Lithuania have also shipped sizeable tonnages of AN to the UK in the past couple of months, he adds. The Ukraine is also under scrutiny.

Some material is thought to originate from Russia. Theoretically, this was priced out of the EU market after the introduction of a £21/t duty last year. But traders, desperate for hard currency, are thought to be moving Russian nitrogen across borders and labelling it accordingly.

This alleged fraud and associated suspect customs procedures has sparked further investigation by European Commission officials. But, with the Mafia almost certainly involved, they face a tough task, says the source.

“The economies of these countries are supposedly in transition. In reality, they are bordering on crime and chaos. We are dealing with a very delicate situation.

“We are trying to make the authorities take notice before these crooks put us out of business.” Hydros Tony Robinson, president of the Fertiliser Manufacturers Association, reckons his company is losing money at current prices.

“Oil and ammonia prices are starting to recover, and we have got a low priced end product. We are facing a pretty tough six months.”

His main concern is substantial imports of Lithuanian material which could have a “significant impact” on the UK market.

But John Ridd, managing director of importer Usborne Fertilisers, blames merchants for undermining values, rather than imports.

“Some merchants have been trying to place UK-made material on farm in the high £70s/t. We are aiming at a similar sort of level to maintain parity.

“UK manufacturers should show some strength – the tail has been wagging the dog for too long.”

He suggests any price rise resulting from further duties is effectively a tax on inputs. “It is ridiculous for Brussels to try to ban trade with the rest of the world when it is trying to reduce the agricultural burden on the EU. We will be protesting it, and I suggest farmers do too.”

    Read more on:
  • News

EU clampdown on cheap N may mean price hike

3 September 1999

EU clampdown on cheap N may mean price hike

FERTILISER prices could rise sharply next spring if, as expected, Brussels responds to manufacturers demands and slaps anti-dumping duties on cheap and sometimes illegal nitrogen imports.

The main target is material from Eastern Europe, which is undercutting EU-made product by up to 30%. Industry sources report several strong export surges this season after the ending of voluntary tonnage ceilings, the collapse of the Russian market and continued over-capacity in the east.

Cheap imports, which accounted for almost a quarter of nitrogen sales last year, coupled with reluctant farmer buying, have kept on-farm prices for UK material at £86-£88/t this season. While this is good news for farmers, makers claim they are struggling to make money at prices no better than last years, which were the lowest for 13 years.

Consequently, the recent imports have triggered a rash of complaints from several European manufacturers to the European Fertiliser Manufacturers Association, which is pushing Brussels to investigate the problem.

Most nitrogen has come from Poland, either as liquid urea/ammonium nitrate mix or solid AN. "The Polish industry is about to privatise, so it has to prove it can make money," says one source. Georgia and Lithuania have also shipped sizeable tonnages of AN to the UK in the past couple of months, he adds. The Ukraine is also under scrutiny.

Some material is thought to originate from Russia. Theoretically, this was priced out of the EU market after the introduction of a £21/t duty last year. But traders, desperate for hard currency, are thought to be moving Russian nitrogen across borders and labelling it accordingly.

This alleged fraud and associated suspect customs procedures has sparked further investigation by European Commission officials. But, with the Mafia almost certainly involved, they face a tough task, says the source.

"The economies of these countries are supposedly in transition. In reality, they are bordering on crime and chaos. We are dealing with a very delicate situation. We are trying to make the authorities take notice before these crooks put us out of business."

Hydros Tony Robinson, president of the Fertiliser Manufacturers Association, reckons his company is losing money at current prices.

"Oil and ammonia prices are starting to recover, and we have got a low priced end product. We are facing a pretty tough six months." His main concern is substantial imports of Lithuanian material which could have a "significant impact" on the UK market.

But John Ridd, managing director of importer Usborne Fertilisers, blames merchants for undermining values, rather than imports.

"Some merchants have been trying to place UK-made material on farm in the high £70s/t. We are aiming at a similar sort of level to maintain parity. UK manufacturers should show some strength – the tail has been wagging the dog for too long."

He suggests any price rise resulting from further duties is effectively a tax on inputs. "It is ridiculous for Brussels to try to ban trade with the rest of the world when it is trying to reduce the agricultural burden on the EU. We will be protesting it, and I suggest farmers do too." &#42

    Read more on:
  • News
blog comments powered by Disqus