By Roger Chesher

TERRA, like Hydro, is now forecasting a return to a more structured fertiliser market for next season.

This confidence is brought about by last weeks announcement of further reduction in production capacity in the industry, and a return to a supply/demand balance for ammonium nitrate.

By “structured market” the majors mean price stability.

An environment where farmers can purchase at discounted prices early in the season, confident that prices will not degrade as the season progresses, but will, in fact, steadily increase as smaller discounts are applied.

Several factors must be addressed if they are to achieve this.

First, the manufacturers must not allow a trust market to develop. This they have so far avoided by insisting on cash terms.

Second, they must find a way to engender the confidence of structure now lost.

We could well soon see some rationalisation of fertiliser sellers at merchant level, either through market forces or action by suppliers.

Third, the issue of unfair competition by overseas suppliers must be addressed.

There has long been a place for imports in the UK marketplace, but this competition has been deemed unfair when prices are lower than the cost of domestic production.

The industry is reviewing anti-dumping legislation at a European level.

Currently, the combination of specific duty and minimum import price on Russian ammonium nitrate stands at Euro26 and is due for renewal in August.

The hope is for a renewal of this situation and for a new case against Polish, Ukrainian and Lithuanian ammonium nitrate.

In each case the tariff hoped for is an increased level of Euro30-40/tonne in line with current domestic pricing.

Meanwhile, little has changed in this week in our markets.

After-cut sales are a little slow, mainly because of exclusively cash pricing.

Imports also remain low as cargoes are cleared onto grass farms.

  • Euro1 = UK0.599 on 17 May

    CURRENT MARKETS

    Immediate delivery N (SP5) June delivery N pay cash Imported urea (if available) Imported AN (if available) Blended 20.10.10 Blended 25.5.5 Liquid N, 37kg/100l or 29.6% N/t
    £116 £120 (forecast) Granular unavailable; prilled 105 92+ £110+ £101-103 £103-107/100,000 litres or £81-87/t

    NPK April, pay cash
    Complex 25.5.5 111-113
    20.10.10/29.5.5 121-123
    17.17.17 130-133

    After-cut NK cash Complex 15.15.20 TSP (47% P2O5) Muriate of Potash (60% K2O)
    108-116 130-135 128 128

     

    IRELAND

      Imported urea

    CAN

    0.23.24

    0.16.36

    Complex compounds
    27.6.6

    Northern Ireland Not available 95 No market No market 125-126
     

    CAN

    0.10.20

    Urea, imported

    27.21/2.5

    Republic of Ireland* 110-124 No market Not available 155

    *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£

  • IR1=UK0.760 on 17 May

     

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

    Source: Bridgewater Partnership