Slow farmer buying keeps lid on fertiliser prices

Reticence on the part of farmer buyers has kept merchant margins low and our prices below those of the rest of Europe. UK prices have moved from 6% behind those in continental Europe to 9% since the start of the season, writes commentator Roger Chesher.

Cashflow pressure from a drop in wheat yields, discounts on grain quality and an 8% fall in the value of the sfp are weighing on the UK market, but there is an estimated 1.3m tonnes to deliver in the next three months, leading some to predict logistical pressure in January and February.

The start of the month saw GrowHow give forward prices through to January. This looked for a Nitram price of around £302/t for October delivery, pay November, with the product currently going on to farm at £299-301/t.

Fertiliser update October 2012 (£/t delivered)
UK 34.5% N £299-301
0.24.24 £345
Imported urea 46%N £340-360
Imported 34.5%N (Polish Lithan range) £285-295
25.5.5 £305-310 complex
£283-290 blend
20.10.10 £310-322 compound
£295 blend
Phosphate (TSP) 46%P2O5 £355-370
Potash (Muriate) 60%K2O £315-325

GrowHow’s list price adds £5/t each month for November and December with a bigger hike in January ultimately leading to a spring list price of around £330/t. Merchants fix their own margins so there may yet still be some cheaper prices around.

The forward prices for UK manufactured AN will be reviewed month-on-month in line with the market. Yara has increased the price of its 33.5% AN in France to €359/t bulk to merchant. Add a bag, delivery and margin and convert to 34.5% and this equates to £329/t.

UK stocks of imported urea and AN are beginning to dwindle; importers are replacing them at higher prices although AN from northern Europe is in short supply. India still needs 2m tonnes of urea before Christmas, which will probably be supplied by China.

Some imported stock is available at discounted prices but merchant stocks are low, while importer stocks at docks are higher but not discounted.

Compound prices have fallen, with 25.5.5 now about £305/t. For compounds, list prices rise by £5/t and £3/t a month to Christmas and then by £2/t or £3/t a month through to March. P and K prices are static.

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