Somethings got to give…

THE autumn PK market, such as it is, rumbles on quietly and nitrogen continues to trickle onto farm around £85-87 delivered. “We must”, say the manufacturers, “have really hit the bottom now!”

This is, of course, good news for farmers who can reasonably expect these current ultra low prices to continue until “something happens.”

The point about this European, if not global, fertiliser business is that if the bottom has truly been reached, then something will happen. Someone, somewhere will close down and capacity will leave the industry.

Already, on a European scale all the major manufacturers have tweaked production to some extent by shutting down minor plant. This hasnt happened yet in the UK but is always an option.

The scale of the situation is that within Europe, which is a market of 12m tonnes of nitrogen, there is an excess capacity of 2m tonnes. Thats actual N, not product, so taking compounds and nitrogen together as containing, on average, 25% N, this translates to an excess of 8m tonnes of fertiliser.

Hydro and Kemira continue to assert their continuing interest in agriculture, including plant nutrients. Conversely, IFI, Terra, DSM and GP amongst others have either in the past or are currently expressing a wish to leave the fertiliser industry.

Clearly, something must give and if the market has truly bottomed out it will be soon.
Meanwhile, fertiliser prices on farm have rarely been keener.

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