MORE FERTILISER price rises are on the way as manufacturer concern grows over gas costs.
The volatility of the forward price for gas, currently hovering around 55p per therm, linked with high energy costs generally makes it impossible to achieve a profit for UK fertiliser produced in the winter unless prices rise.
Exactly how much gas has already been booked, if any, at earlier forward prices is unknown, but even at that time 40p appeared expensive and gas buyers would have expected a downturn, not an increase.
The “firm” prices for compound fertiliser going through to December, issued by GrowHow last week (w/e Sept 24) have now been suspended while it evaluates its strategy.
It seems that currently the only meaningful domestic major producer’s price is for Terra ammonium nitrate in January.
At £150/t delivered this will give farmers quite a shock.
There will be certain tonnages of fertiliser in stock which were produced at lower gas values and a modest price rise on these could help to balance out the situation.
Alternatively, producers could temporarily cease to manufacture ammonia in the UK, relying instead on imported supplies.
But this in itself would disrupt the fine supply and demand equation for ammonia and in turn lead to increased pricing of that commodity.
Behind these options the underlying gamble is when to book gas supplies. Will the price hold, or fall back?
Farmers will be hoping for a mild winter.
Nitrogen (Domestic) N (SP5) 34.5%
Imported AN Lithuan
No market yet
|Trace elements||0.24.24||TSP (47%P2O5)||Muriate of|
|Copper, zinc, selenium,|
cobalt Iodine and sodium Per acre pack £11.10
|Blended £130-5||£142 rising||£131|
Benchmark prices. Compounds out of season.
Urea, existing stocks only
CAN, large price variations
27. 2.5 . 5
(dependant on source and quality)
€200 import blend
*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.
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.