By Roger Chesher
DOMESTIC fertiliser manufacturers have clearly set out their stall for 2001, saying “more of the same”.
But will the new structured market hold and what will be the impact of our new reliance on imports?
The picture is fairly clear up to the June end of season. Domestic ammonium nitrate will rise by some 2 to reach a peak of 134/t in March, where it should stay until June.
There are rumours of a “spring” price higher than this, but intense market activity should hold this in check.
Imports will pitch in at about 12-16 below domestic, while current stocks last.
World prices are such that they will probably come closer to a 10/t differential at the usage period, as 2001 imports start to replace those currently at the docks.
The farm pattern of “just in time ” purchase will continue and will place great pressure on suppliers to deliver.
Each year they bemoan their logistical problems, but fertiliser still gets to farm.
The problem is, however, genuinely becoming quite serious as legislation and economics have strictly reduced the number of available qualified drivers.
In July a new price structure will come into play.
Expect cash only prices from UK manufacturers and to pay 115-120/t, rising month on month to 140/t after January 2002.
Well over half a million tonnes of imported nitrogen will be needed this year to make up the domestic shortfall.
Sadly for consumers, there are few signs that this will be particularly cheap.
Nearly all the factors affecting price currently support an upward trend, especially feedstock, raw material and ammonia prices.
But the fertiliser price cycle seems to be getting shorter and with all the change in the industry it could well become a little flatter.
If cheap nitrogen is a thing of the past, then at least we may get a period of stability.
Change, where it comes, will be in the supply chain.
More rationalisation amongst farm merchants is inevitable.
Before long the prospect of Internet trading must surely make an impact.
It seems likely that the percentage of fertiliser sold via traditional agricultural merchants will decline significantly this year.