Majors predict higher demand for nitrogen

By Roger Chesher

BOTH Terra and Hydro have been communicating their thinking about the new fertiliser season, and their line on nitrogen is pretty comparable.

They expect higher demand than in 2000/2001, and are offering deals on a cash-only basis, with incentives for the early buyer.

Hydro now operates on an ex-works basis and quotes granular “Extran” at 97/t for July. But with the books about to close on this month, Extran will rise to 99/t for August.

Extran will soon be available from a number of locations in the UK. But transport legislation requires a licensed haulier to carry ammonium nitrate, so collection by tractor and trailer will not be an option.

With production 365 days a year, logistics offer about the only opportunity to maximise returns for the manufacturer, or to save money for the farmer.

The economic unit is an articulated lorry load of 24 tonnes, and the biggest savings are to be had when this is moved straight from the bagging plant or dock to the farm in one go.

Manufacturers will be less interested in negotiating large tonnages for later in the season and more interested in avoiding storage and handling costs now.

An on-farm price of 106-107/t makes Extran look cheap compared to UK-produced ammonium nitrate. But remember that imported Extran is 33.5%N compared to domestic 34.5%.

If you do the comparison, the August price equates to 110-112/t; the same as the other big producers. Hydro also markets a 34.5% prilled nitrogen sourced from Terra.

Market trends: The early market is active, the PK market still slow and the grass market reasonably buoyant at unchanged prices.

IRELAND