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

Urea

The global urea market is currently undecided on which direction to take, but remains relatively bearish. Global activity is minimal and expected to continue this way until the end of August, when Pakistan will tender for 300,000 tonnes. Although there are many factors influencing the market, this tender is likely to be the next factor to influence a market movement. Granular urea levels remain high, with producers unwilling to drop prices. Demand in Europe and the UK is minimal as harvest is well under way, but the outlook is positive and may present a good buying opportunity in the very near future.

Prilled urea this week has corrected downwards somewhat due to a mixture of minimal demand and a stronger US$. Now we have seen this correction, it is likely that many traders that have been waiting for the market to correct will now buy and this may either stabilise the market, or create a rebound. The spread between prilled and granular urea is still significant, but the hesitancy on both the buy and sell sides to commit to new sales could narrow as prices continue to correct further.

Ammonium Nitrate

Globally, small shipments of AN are being traded in a market that still appears to be steady, although slow paced. Prices have not altered significantly for many weeks, even with the movements seen in the urea market. In the UK, national prices are expected to rise by £4 per tonne from 1^st September. However, farmers are currently buying imported AN at prices that reflect around £280 delivered. Compared to the price seen this time in the 2011, ammonium nitrate still remains approximately £30 lower than last year, an excellent buy considering where grain prices are today.