Calum Findlay, Gleadell’s fertiliser manager, comments on the fertiliser markets

Urea

The perception that the reduction in oil and gas prices will lead to cheaper fertiliser, especially urea, as we enter the Christmas period is not supported by recent trades. 

By contrast, urea values continue to rise, mainly due to demand outstripping supply for January/February vessels. Many producers in Iran, Arabian Gulf and China have cleared surplus stocks following the Indian tender a couple of weeks ago. In addition, gas supply problems are once more evident in Egypt and the ongoing turmoil in the Ukraine could present further price implications as we enter January.

With further tenders and increased global demand expected in the coming weeks, buyers should be now looking to secure more tonnes.  

Ammonium nitrate

Following last week’s AN/CAN increases by Yara in France and Germany, GrowHow UK has again raised nitrogen prices for both December and January delivery periods.

Nitrogen deliveries in the UK continue to run behind normal and recently published AIC figures show clear evidence that we are seeing a change in the phasing of AN deliveries, with many growers now spreading their ordering over the season rather than taking all their tonnes in the traditional June-August period.

Imported nitrogen is still being delivered onto farm at similar values to those seen all month, making spot deliveries some £20/t cheaper than UK product. Looking forward to February, importers are suggesting values in the region of £265-270/t delivered to farm, so the gap may close at some stage.

NPK

Farmers should be ordering their spring NPK/PK requirements without delay. Blenders are desperate to sell product before Christmas to ease the expected spring rush, and delivered prices are well below the replacement cost of individual raw material costs. This means the cost per unit to farmers is less than for straight P and K. In addition, ordering before January will secure the correct grade. As of 1 January many blenders will be limiting the grades on offer to ensure production and delivery efficiencies.