Fertiliser market report – January

Sales of fertiliser on British farms have increased since Christmas but the volume is by no means as great as anticipated, which means that even more pressure will be placed on the market in the usage period.

Current sales are well behind last season and best estimates are that over 1M tonnes of product have still to be sold to accommodate projected usage figures.

Whilst this strange delay continues, UK prices for nitrogen become more divorced from the situation in the rest of the world, so much so that when our market does pick up there could be very significant and steep price rises.

Gas prices have been a significant driver underlying recent hikes in fertiliser prices, as everyone knows. And, recent press stories highlighting reductions in energy prices, on a daily (spot) basis, have led farmers to sit tight in the hope that fertiliser prices will at least not get worse and may, in fact, come back a little.

Supply and demand

But, as in the trading of all commodities, the over-ruling factor in the price of fertiliser is the law of supply and demand.

The UK does not stand alone.The fertiliser industry is irrevocably entwined in the global market. We benefit from cheap imports and downward price pressure during a nitrogen glut and conversely have to accept upward pressure when nitrogen is short.

Thanks to a massive purchase by energy-poor India, and with 3M tonnes extra urea required in the USA to grow crops for ethanol, global urea is now priced at an all time high. Prilled urea is $325 cif,  which will mean £193/t bagged on farm. However, UK farmers can still buy superior granular urea from UK stocks below £180/t.

Domestic producers were anticipating that 2007 prices would start at £160/t for 34.5%N ammonium nitrate, but Merchants are still offering product in the region of £155.

Diminishing stocks

At this price even the Russians can’t compete and Lithuanian N in UK stores looks exceptionally cheap in the high £140’s/t
With the Terra plant shut down for routine maintenance for 3-4 weeks it may not be long before UK stocks start to diminish and the influence of high world prices will bite.

It is only the presence of our own fertiliser industry which is holding prices back now that the price pendulum has swung. This week’s expected decision of the OFT regarding the proposed joint venture between Kemira and Terra is therefore of particular importance. Without such a venture the future prospects of both organisations look grim.

The market has yet to start in Ireland. Farm prices are meaningless at present and though blenders and merchants are, to a degree, stocked up, future prices must reflect the world situation.

Great Britain

Straight

Domestic N
(34.5%N) SP5

Imported AN 
Russian Lithuanian

Imported urea

Liquid UAN
37kg N/100litre
 (29.6%N/t)

 

Jan pricing still around £155

UK stocks
£146

Granular £185 some cheaper still around

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

£155

From £148

     

15.15.20

£168

 

     

20.10.10 / 27.5.5

£158

From £145

     

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 £180 £160 £170
Republic†
of Ireland
No data, but competitive €220-225 €275  

€275 (CCF)

€245 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.
*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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