Confident merchants store nitrogen

By Roger Chesher

AS manufacturers and merchants wind down for the increasingly long break of Christmas and New Year, it is surprising to find movements of fertiliser continuing.

These are mainly NPK products, especially those high in nitrogen, moving primarily on to farm, but also into merchants stores.

The majors have not offered storage deals to their merchant customers this year, so product which finds itself in store is as a result of the dealer paying cash and bearing the cost of storage himself.

This implies confidence in the higher spring price.

The book for December is now closed, so the only way to avoid the big jump in prices is to find a merchant with a collection tonnage booked who will still have access to December prices until the end of the month.

The major manufacturers now deliver some 70-75% of fertiliser sales direct to farm, and once that tonnage is fulfilled each month, the next months price ruling applies.

Unless, that is, product has been booked for collection, in which case the purchaser has to the month end to complete the transaction.

So, with the biggest monthly jump in prices (6/tonne) now imminent, we enter the most interesting phase of the market, the point at which those buyers anticipating a price collapse may, or may not, find their hopes or expectations realised.

No doubt there will be a period of taking stock in early January before any significant movement occurs.

But, with an estimated 1.05 million tonnes of nitrogen still to be delivered, only half the anticipated spring imports on our shores, a more balanced manufacturing capacity and huge increases in feedstock costs, it would be highly surprising to see prices fall significantly.

CURRENT PRICES

IRELAND