Compound cost up as nitrogen stays steady

By Roger Chesher

JUST as the Cereals Event signals a new seasons set of nitrogen terms, so the Dairy Event flags up a new round of compound fertiliser prices.

And new prices will not look good to hard-pressed farmers.

British producers of compounds, be they a small blender or a major complex compound producer, are all facing an unprecedented hike in raw material prices.

The nitrogen situation is now well understood and UK-produced potash prices are already higher than last season, but raw materials buyers are currently experiencing a double whammy over phosphate pricing.

Like the nitrogen manufacturers, phosphate producers have taken steps to bring supply and demand more closely in line.

Not only is phosphoric acid and its derivatives priced higher than last season, but because it is purchased in dollars, the current level of the Pound at $1.40 puts a 7-10% increase on phosphate purchase prices in exchange rates alone.

Di-ammonium phosphate (DAP) is currently available here around 145/t delivered, which would place it on farm at 160/t.

MAP is similarly priced, and TSP has been reported at 180/t, bagged, on farm.

Clearly the current compound pricing, based on old nitrogen costs and last season P and K, is not sustainable.

While Terra leads the nitrogen market, Kemira holds the reins on the compound front, being Britains sole remaining large producer of complex compound fertilisers.

We therefore await the imminent publication of Kemira compound prices, which will trigger the market.

Obviously compound prices will rise, but the manufacturers are keen to stimulate a “carry” market and so are bound to build in sufficient early discounts to make it attractive for merchants to place material in store and for farmers to seek credit.

From a relatively modest October base we would expect to see a month on month increase of about 2/t, with almost certainly a larger hike of about 6/t in January.

Meanwhile, Terra has revealed plans for tits own compound range, which will now comprise high-quality home-produced blends from Severnside, each one claimed to be size-matched, coated and capable of spreading to 24m without segregation.

Turnout, First-Cut, No.8 and Easy Graze are on offer in the grass sector, but some analyses have changed.

IRELAND