Another price hike seems on the cards for January nitrogen.

Domestic producers were hoping to limit further rises this season but now it seems that a price of more than £170/t is on the cards for UK 34.5%N ammonium nitrate, delivered to mainland farms.

Merchants and distributors should learn later this week if this is the case, as Terra Nitrogen, the market leader, invites offers for January business.

Kemira GrowHow and Yara will almost certainly immediately follow suit.

With potash and phosphate costs also on the increase, compound fertiliser price rises will inevitably follow.

Recent forecasts of a long cold winter coupled with a lack of UK gas storage capacity have yet again pushed gas forward prices upwards.

As Terra is determined to meet UK demand for fertiliser, prices must rise to cover costs.

The alternative is to shut down production as is already happening in the USA.

This will come as a shock to many farmers who were confident of steady prices and were even beginning to hear trade rumours of a fall in fertiliser costs.

Perhaps this is the reason why the market is somewhat dead at present, there being no feeling that it is necessary to snap up remaining domestic tonnage, or the imports on Britain’s quaysides, at December prices.

With 2m tonnes or more of fertiliser yet to be sold this season, and a continuation of relatively high prices, merchants could well now be ready to stimulate the pre-Christmas market fully, to ensure that customers needs are covered at lower cost.

CURRENT PRICES (£/t)

Great Britain

Ireland

†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