Higher nitrogen prices could be on the way

Nitrogen prices look like rising again. The major manufacturers withdrew lists earlier this week and as Farmers Weekly went to press were expected to re-issue at higher prices later in the week.

UK manufactured ammonium nitrate has been going to farm at £202-£209/t delivered for September-November, but the new terms were expected to seek to push for another £10/t for November.

Imported ammonium nitrate has been barely able to compete with UK product and for spot delivery was at £200/t-£208/t delivered to farm midweek, and expected to follow any UK product price rise.

There is no availability problem with the main products, but globally urea prices have risen sharply in recent weeks on the results of new Egyptian tenders and some short covering in Europe.

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In the UK, the indicative price for new cargoes is about £250/t delivered to farm for late autumn, an uplift of £30/t-£40/t compared with mid-August priecs.

However, odd pockets of older stocks are available spot at less than £250/t.

With an estimated 65% of eastern arable area nitrogen ordered and harvest and fieldwork taking priority, recently rising prices have meant farmers have largely withdrawn from the market.

This in turn means importers are reluctant to book new urea cargoes on rising prices, so something of a waiting game is under way.

Traders say that with good availability, there is nothing to support further significant price rises, so they expect farmers to wait until later in the season and take a risk on the price.     

As well as higher prices, restricted cashflow means growers are only ordering what they need to cover. The trend for straights continues, putting blenders under more pressure.

Potash has risen slightly in the past few weeks, with muriate of potash (MOP) at £250/t-£255/t right through to December, up by £5/t-£10/t on mid-August prices.

However, DAP (currently £250-£255/t) and TSP (£260/t-£265/t) prices remain in a similar range to a month ago. Again, availability is no problem.