Fertiliser prices stable despite dormant market

By Roger Chesher

AS indicated last week, the fertiliser market is quiet, “quiet to the point of being dead “as one importer put it.

Sometimes in a dormant market there is a tendency for prices to drift downwards, but most people involved in the fertiliser supply chain now agree that “numbers are firm”.

In this situation, importers and blenders will be contemplating their opportunities for the spring.

With the Pound back at $1.44, imports are currently expensive with ammonium nitrate, bagged, on farm at 110 and it is anticipated that this 10 differential between domestic and imported nitrogen will continue.

Some half million tonnes of imported nitrogen must come into the country between now and February/March. There is probably enough granular urea in the country already, on farm at 140-144, but prilled urea is short; farm price 130.

The worry now, say importers, is that imports of AN havent really started and a spring rush will make logistics very difficult.

This is a familiar story, but transport is genuinely becoming more and more difficult each year.

In this quiet period, the domestic manufacturers stocks are building, but are still low enough to have no impact on price.

The Big Three are now the Big Two as far as nitrogen manufacture is concerned, following the closure of Hydros Immingham plant.

With fixed forward gas prices, albeit at a very high level, they can plan their prices into the spring.

Blenders on the other hand have no forward position beyond the end of November and no clear indication of raw material costs, other than the N they buy from Terra.

They therefore have to track the UK producers to ensure a profit and tend to pitch 5-7 below complex compound prices.

Interestingly, the majors prices are in line with world trading, as one would expect within this now global industry.

If the NFU are successful in gaining a review of anti-dumping levies, one suspects that the majors will be delighted to show the Commission their books.

The irony is that in the current marketplace, without a levy the market would probably take a higher profit and import prices would remain as they are.

IRELAND