Fertiliser Market Report-February 2007

Newly released figures for nitrogen imports into Britain confirm a boom in urea sales following its bargain price at the start of the season. Figures from June to December 2006 indicate 57, 000 tonnes more urea than last year. However, they also indicate a substantial shortfall of 81,000 tonnes of ammonium nitrate giving a net shortfall of 24, 000 tonnes of fertiliser.


However, given the difference in concentration between the two, the total amount of nutrient nitrogen imported is broadly similar, year on year.


Of course, the spell of cheap urea is long gone and as orders are fulfilled, reports of a shortfall in supply over sales of the cheaper material are starting to emerge. It seems that farmers are being offered equal amounts of N in alternative products such as CAN (calcium ammonium nitrate) at the agreed price. Certainly, replacements stocks of urea at current world prices now cost in excess of £185 on farm.


This reflects the fact that UK fertiliser prices currently lag way behind the booming global market and whilst £150-155 for ammonium nitrate may seem costly to UK farmers, on global terms it actually represents a bargain. The leaders of Terra and Kemira will be working hard to justify these low prices to their American and Finnish masters.


But, with UK manufacturers having stocks at present and British farmers still not buying, prices remain low thanks to the laws of supply and demand.


However, autumn plantings are up, farm purchases are down and farm stocks modest. Unless there is an unlikely slump in grass farmer purchases there will still be in excess of 1Mt of fertiliser to deliver before the usage period.


If the rush starts tomorrow, that means around 17, 000t of deliveries per day.


At present that is still just about achievable but the daily tonnage becomes greater and more difficult for each day that the market stagnates. It is obvious even now that it will no longer be possible to pick up the phone a few days before spreading and expect immediate delivery.


Whilst we read of drops in the wholesale price of gas, much of the fertiliser currently available was manufactured weeks ago using more expensive fuel and even today’s manufacture will include some gas bought forward. And with manufacture currently at the most expensive point in the annual cycle it is easy to speculate that UK plants might temporarily shut down ammonia production whilst fertiliser remains in stock.


Ammonium nitrate at £160 per tonnne is still a possibility.


The market in Ireland is also yet to start. Here the logistics are easier even though the tonnages are similar. This is because the 1M or so tonnes in the Republic and 300,000t in the North are distributed widely in depots or merchant’s stores. Price indications are beginning to emerge in the South with urea around €300/t and with CAN in the low £150’s/t in the North.
However, the market in Northern Ireland is suffering from confusion following the Phosphorus (P) regulations that came into being on January 1st this year. The demand for “zero P” compounds will be great from those who are precluded from using P, and also, to be on the safe side, by those who are unsure. Demand will initially exceed supply.


Great Britain

















Straight


Domestic N
(34.5%N) SP5


Imported AN 
Russian Lithuanian


Imported urea


Liquid UAN
37kg N/100litre
 (28.8%N/t)

 

Feb pricing still around £150-155


UK stocks £146


Granular £185++ Previous cheaper supplies virtually exhauted.


Prilled £175 (replacement £195)


£165


 











TSP (47%P2O5) £148 upward trend  
Muriate of Potash (60%K2O) £148 upward trend  

 












































































Compound


N.P.K


Complex


Blended

     

25.5.5


£150-155


From £146

     

15.15.20


£168


 

     

20.10.10 / 27.5.5


£153-158


From £142

     

17.17.17


£173


 

     

Aftercuts (NK)


 


No market

     

27.6.6 (imported)


 


 

     

32.5.0 (imported)


 


No market

     

Autumn grades (PK)


 


£134-138

     

 


 


 

     

 






Trace elements Copper, zinc, selenium,
cobalt Iodine and sodium

£11.80/acre pack

Ireland
























 
Urea

CAN

24.6.12
aftercut**

25.5.5

27.6.6
complex***
Northern
Ireland
No market £152+ No market £160 £170 27.0.6 £152
Republic†
of Ireland
€300 €233 No market  

€276 (CCF)


 


*†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.
*Known as 24.2½.10 blend in the Republic of Ireland
**Known as 27.2½.5 in ROI







Note All illustrated prices are based upon 24 tonne loads for immediate payment.


Prices for smaller loads and those with credit terms will vary considerably.
Source: Bridgewater

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