Buyers market as fertiliser is oversupplied

EVEN though imports are some 250,000 tonnes fewer than last season, the fact that there are any at all means that the domestic fertiliser market is oversupplied and the simple rules of supply and demand result in a buyers market.

In broad terms, British production has the capacity to supply the whole UK nitrogen market when fully utilised, which is currently the case.

Hopes or fears that Terras announced sale by the end of April would result in an acquisition of UK plant by one of the majors have been dashed as the Terra sale remains firmly on hold. This could have lead to an early reduction of output and hence a higher price .

Low prices for the farmer put pressure on the producers however, and in time something must give.

This could well be the blender whose ability to turn supply on and off in accordance to market dictates is greater than that of Terra, Hydro or Kemira.

The trend to purchase fertiliser only when needed and at the last minute continues, but the industry fear that this would give rise to local shortages or logistical nightmares does not seem to have materialised.

The result of all this is that fertiliser remains readily available and competitively priced . Indeed the latest market, that of "aftercut" fertilisers, has opened in the south west with no increase over last years bargain prices at all.

With K-N and K-N-S blends about £93-96 tonne and no sign of prices increasing, farmers have no reason to alter the current trend of "just in time" purchasing.

CURRENT MARKETS