Hopes of lower prices cut nitrogen sales

By Roger Chesher

WITH the prospect of nitrogen prices coming down next month as the early delivery rebate of an expected newly structured market comes into play, it is not surprising that sales have been extremely low this week.

Likewise, prices have barely changed.

In the arable east the market is “dead”, and only in the grassland areas is business being conducted as farmers buy fertiliser for aftermaths.

This aftercut market has been hard to read this year.

The industry was expecting significant volumes despite higher prices than last year.

When they didnt materialise early on, it was assumed that the market was delayed as farmers currently purchase only when product is about to be applied.

Rain and late cuts have also confused the picture and now, with the northern grass harvest being larger than anticipated, the pressure to fertilise aftermaths is reduced.

The market seems to be about 20% down on average and it is no longer clear that the anticipated later business is still available.

With pressures on farm costs, slurry and cheaper imported straight nitrogen are being applied at the expense of NK.

Fertiliser stocks, whether on-farm, in merchants stores or at the factory, are currently very low.

The anticipated lower early season price could therefore stimulate some movement as reduced stocks are usually equated with higher pricing.

Available volumes of imported nitrogen are still low and the price has crept nearer to 100.

Importers are signalling that the differential between imports and domestic nitrogen next season will be about 10-12, which is about usual, but a narrower gap than at present.

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