By Roger Chesher

COMING as it did, just before Easter, the news of an investigation into fertiliser pricing by the Office of Fair Trading is taking some time to percolate through the industry.

Those directly affected, Terra, Hydro and Kemira, face a costly and time consuming response period when their already stretched resources should be concentrated on “the day job”.

Generally, the industry response from the Fertiliser Manufacturers Association is that it sees no reason to have anything to fear, that it to a certain extent was expecting the announcement, and is looking forward to clearing the air.

One leading importer has gone so far as to suggest that the industry has more to gain than to lose, in terms of better on-farm understanding of this complex market.

“UK producers will welcome it, we dont believe it will reveal anything”

Conversely the NFU clearly feels the industry has a case to answer, citing widespread outrage from its members, brought about by this seasons price rises.

But, to continue at old-season prices would have meant more massive losses, say the manufacturers, who have only seen a profit in four years since 1990.

Now that the market is pan-European, if not global, tracking the complex mix of capacity changes, inventories, energy costs, imports, demand and world prices, which determine price, is increasingly demanding.

One outcome of the investigation may well be better communication enabling farmers to purchase fertiliser more cost effectively than simply waiting until the point of use.

For example, while the current market continues to be very quiet, and prices have little changed, the prospect for cheaper nitrogen in July is good.

With the realisation that the first dressing on grass is now probably lost for good, and that spring cereal plantings are significantly down, the current season could well finish some 15 to 20% down in volume.

The weather-driven situation is similar throughout Europe as interest in the current market starts to evaporate.

Consequently in terms of ammonia and urea pricing the global market is weakening.

Current import arrivals are existing contracts, whose price reflects todays market, whereas new cargoes for the start of the next season in July reflect the changing market and could well be pitched at 95-100/t on farm.

New-season domestic prices will probably reflect this seasons, starting around 105-110/t on farm.

While there may be a little respite in compound prices next month as the aftercut season starts, there seems little alternative to biting the bullet and paying end of season prices for product for immediate usage.

CURRENT PRICES

Nitrogen (SP5) 34.5% Anticipated new-season spring price nitrogen Imported urea (if available) Imported AN (new season) Blended 20.10.10 and 25.0.16 Blended 25.5.5 Liquid nitrogen, 37kg/100l or 29.6% N/t
April/May 134
July 105-110
Granular 144
Prilled 132
120-122 ex-stock 124-126 121-123 140
NPK Imported AN April, pay cash
Complex 25.5.5 July 95-100 132
27N30S
20.10.10/29.5.5 135
17.17.17 151
After-cut NK cash 0.24.24 TSP (47% P2O5) bagged Muriate of Potash (60% K2O) bagged
No market 114-116 135-140 115-118

 

IRELAND

  Urea

CAN

24.6.12

0.16.36

Complex compounds
27.6.6

Northern Ireland Domestic prilled 150
Imported 140+
122+ 155 No market 153-155
 

CAN

24.21/2.10

Urea, imported

27.21/2.5

Republic of Ireland* 145-155 190-193 190 187-190

*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=UK78.19p; US$1=UK70.13p on 18 April

     

    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