Trade wrong on AN
TRADE talk of a £135/t start to the ammonium nitrate season has proved unrealistic.
ICI has opened its new season campaign putting on-farm prices for early delivery between £125 and £128/t, £10 less than last weeks opening quote from rival domestic producer, Hydro Agri.
But with the company demanding quicker payment from merchants, farmers could find themselves facing tougher terms, too.
"Driving the market back to cash reflects good business practice," says ICI Fertilisers commercial manager Stuart Beer. And he expects this "move to cash" to be a permanent feature of the market.
Cut-price imports, currently available at about £112/t on-farm, have been a factor in manufacturers start-prices this season. "The gap between imports and domestic products seemed to be too wide," acknowledged Mr Beer.
But prices will rise as the year progresses, reaching between £130 and £135/t by September and £160/t next spring, he predicts.
Merchant Allied Grain also expects prices to climb and recommends early buying. "Early business last year paid off by £30 to £35/t and there is a strong case for buying early this year," it says.
World urea prices are already on the way up.
Although this years AN prices are higher, there is now limited scope for further rises, acknowledges Mr Beer. "We are recovering from a huge oversupply situation and the fertiliser market is now in balance."
ICI, like other manufacturers, is again urging farmers to buy early. And it expects about 60% of the market to be delivered by Christmas.