By Roger Chesher

THE Agricultural Merchant trade continues to hold its breath in anticipation of further rationalisation within the fertiliser industry.

This follows the recent announcements by Hydro and Kemira, and further revelations are expected before Christmas.

The most popular speculation is that the two majors will form some sort of partnership and then reduce European capacity, but this does not address the problems of Europe as a whole.

Equally, if not more likely, is that Hydro will continue to put its house in order while Kemira form partnerships with other parties – Grande Paroisse and Fertiberra being possibilities.

The fate of Terra Industries, whose share price has recently dropped significantly, remains the big unknown in Britain.

So far the factors emerging from these announcements all lead to possible price rises in time.

These are:

  • The forecast rationalisation and reduction of capacity in the industry;
  • Rising energy prices;
  • Difficult logistics, with qualified hauliers fewer in number,
  • The possibility of an environmental Energy Levy of £3 million on the UK industry,
  • Prices set to rise as the price cycle bottoms out.
But against that must be set the very significant stocks of fertilisers yet to be sold on to farm, and the difficulty and natural unwillingness of farmers to pay more in the current climate.

If, and it is a big “If”, one of the UK players were to be purchased by a competitor, there is always the possibility of aggressive de-stocking at very low prices. This, however, would be a one-off event.

Meanwhile, little business is being transacted.

The asking price for domestic N is still about £86-87/t with rumours of deals being struck at lower levels which could only mean that merchants take a loss.

PKs trail along at £112-115/t and enquiries are starting for Spring NPK – although no one is as yet buying.

Imports are busier with vessels coming in at several ports. Significant tonnages are said to be unsold with prices on farm from £68/t to the norm of £75-76/t, depending on quality and place of origin.

CURRENT MARKETS

Immediate delivery N
(no market)
December delivery N
January/February delivery N Imported urea Imported N deliver December Imported 0.26.26 Domestic 0.24.24 blended Liquid N, 37kg/100l or 29.6% N/t
£87 £88 £90 £85-90 granular/
&prilled – no market
£73-75 £None available £114-115 £95/100,000 litres or £76/t

NPK Pre-Christmas, pay April January/February, pay April
Complex 25.5.5 97 100
15.15.20 127 130
20.10.10/29.5.5 110 115
17.17.17 130 133

N/S (High S) N/S (Low S) TSP (47% P2O5) Muriate of Potash (60% K2O)
87 87 125 120

 

IRELAND
No urea market at present

  Imported CAN

CAN

0.23.24

0.16.36

Complex compounds

Northern Ireland Prices withdrawn No market 132 132 No market
 

CAN

0.10.20

Urea, imported

0.7.30

Republic of Ireland* No market 140 130 140

*Note in the Republic of Ireland nutrients are expressed as elements not oxides. Analyses will not be directly comparable with those used in the UK..

*Prices in the Republic are IR£

 

Note All illustrated prices are based upon 20 tonne loads for immediate payment. Prices for smaller loads and those with credit terms will vary considerably.

Source: Bridgewater Associates