Nitrogen interest picks up

By Roger Chesher

INTEREST in nitrogen fertiliser is starting to pick up as drilling comes to an end, with reports of the winter cereal acreage being some 30% up on last season.

Market leaders, Terra, did not delay in implementing the expected monthly price rise of 2/t and most traders expect a further hike of 2/t in November.

This means that farm-delivered 34.5%N from Terra, Hydro or Kemira will currently be around 114-116/t and, while some merchants still appear to be trading for little or no profit, there is little room for manoeuvre around this price.

The price pattern is remarkably similar to that of last season, although product is consistently 4 or 5/t cheaper than last year.

The main difference is that forward prices into December, and beyond, are not published this season.

This means that importers have to second guess the market a little, and are less confident about bringing in material until demand is buoyant.

But there should be no problem in finding cargoes able to compete at the usual differential of 10 or 12/t below domestic prices.

It seems a reasonable assumption that domestic prices will creep upwards to 118-120/t by December, but last season nitrogen jumped by 6/t in January and it is this figure which is, at present, unknown.

Greatly increased flexibility means that the majors are no longer forced to build stocks in times of low sales, so the supply-and-demand equation is more finely balanced these days.

This season, therefore, shows every sign of continuing in favour of the early buyer.

New compound prices are expected later in October.

CURRENT PRICES

IRELAND

Forecast prices