Fertiliser price rises hurt merchants


By Roger Chesher


WITH only the after-cut market running in any volume, the majors must be considering the new season starting in June and planning to maintain the recent price rises, which are essential for survival.


This week, Kemira has announced plans to close nitrate production capacity in Holland.


This move, together with those of Hydro and others, will reduce the excess supply of European nitrates to virtually nothing and give a better environment for profitability of the industry.


Merchants, however, are mindful of the current profitability of agriculture and farmers ability to pay for fertiliser.


They are anxious to keep prices down to ensure sales, especially before the new season, as there is doubt about how much of the current market is left.


Often, merchants are taking margins on fertiliser sales which are so low as to be virtually suicidal, and many in the industry are now forecasting a significant shake-out.


Imported Russian ammonium nitrate is selling in the east and south west in the low 90s. This gives a huge differential between domestic and imports of 22-24. The norm is nearer 10.


This is allowing blended NK to be sold cheaper into the after-cut market.


By maintaining a cash structure, producers are able to avoid a trust market developing – take delivery now, sort out price later.


It would seem likely that the cash market will continue to the end of the year.


Kemira UK ownership has still not been announced, but a venture between the French (GP) and a venture capitalist are rumored.


The softening of the Pound, while aiding cereal prices, will increase the cost of fertiliser raw materials.

CURRENT MARKETS




















Immediate delivery N (SP5)

June delivery N pay cash

Imported urea (if available)

Imported AN (if available)

Blended 20.10.10

Blended 25.5.5
Liquid N, 37kg/100l or 29.6% N/t

£116

£120 (forecast)

Granular unavailable; prilled 105

92+

£110+

£101-103

£103-107/100,000 litres or £81-87/t












NPK

April, pay cash

Complex 25.5.5

111-113

20.10.10/29.5.5

121-123

17.17.17

130-133













After-cut NK cash

Complex 15.15.20

TSP (47% P2O5)

Muriate of Potash (60% K2O)

108-116

130-135

128

128

 

IRELAND

















 
Imported urea

CAN


0.23.24


0.16.36


Complex compounds
27.6.6


Northern Ireland

Not available

95

No market

No market

125-126















 

CAN


0.10.20


Urea, imported


27.21/2.5


Republic of Ireland*

110-124

No market

Not available

155



*Note in the Republic of Ireland nutrients are expressed as elements not oxides. Analyses will not be directly comparable with those used in the UK.

*Prices in the Republic are IR£


  • IR1=UK0.759 on 10 May


     

    Note All illustrated prices are based on 20-tonne loads for immediate payment. Prices for smaller loads and those with credit terms will vary considerably.

    Source: Bridgewater Partnership

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