High prices ahead in nitrogen shortage

By FWi staff

NITROGEN fertiliser prices look set to soar over the coming months following a massive reduction in the level of imports.

This signals that a shortfall in supply appears inevitable, said Paul Antcliffe, Cargills UK fertiliser manager.

Order now, because prices wont go down, he urged.

Estimates show that imports of ammonium nitrate are currently about 75% below normal.

December through to January are traditionally very busy months for nitrogen imports. But logistical problems mean that time is running out for the opportunity to catch up before the spring, said Mr Antcliffe.

Imports of ammonium nitrate between June and November totalled just 79,878t. This compares with 282,558t over the same period in 1997.

Farmers have not ordered this season in the hope of better prices in the spring, he said. And merchants have been unwilling to risk importing the product without firm orders.

Despite the fall in demand for nitrogen fertilisers last year in response to lower grain prices, application rates remained largely unchanged, with most farmers taking the opportunity to use up stocks held in store, he said.

“Usage is predicted to fall by about 5% for the coming season, but with no carry-over stocks, the actual volume needed by the market will be very similar to last year.”

By 1 January, UK ammonium nitrate imports were more than 250,000 tonnes behind 1997 imports and the downfall is likely to be even larger this month, he said.

“There is very limited scope for extra imports in the early part of the year,” said Mr Antcliffe.

UK manufacturers have started to build up stocks in anticipation of a shortfall, but they are unlikely to compensate completely, and prices are likely to rise, said Mr Antcliffe.

The Fertiliser Manufacturers Association declined to comment, but Andy Yates of Terra confirmed that the company had been building up stocks since November.

He too was unsure that they would be able to cover total nitrogen needs, but was confident that they could plug most of the gap.

It is all dependent on the size of the market, and a further 400,000 tonnes being delivered from imports, he said

“The prices will be supply and demand driven,” said Mr Yates.