Urea price challenge for AN market

New-season urea offers are out, putting granular product on farm at £208-£215/t.

The low end of the range is for June/July delivery on normal payment terms, with the higher end of the range for delivery at seller’s option any time from September to December.

Deferred payment terms are also available for the early deliveries, simply reflecting the cost of money.

See also: More prices and trends

Urea prices are low on a global scale but UK on-farm prices are about £20/t higher than the very keen early urea offers made at this time last year. The low value of the pound accounts for the increase.

Urea producers are looking to move tonnage in a low-demand part of the year and while there are good offers around, traders do not expect the product to get much cheaper.

An Indian tender for nearly 500,000t is about to close and will add some strength to that argument, they say.

CF Fertilisers UK reaction

The market is waiting to see how CF Fertilisers UK will react to these early urea offers in the run-up to the new season.

Merchants expect it will be keen to compete, looking to build on the growth of its UK AN sales following aggressive marketing in the season just ending.

They advise holding off any large purchases of new season urea until CF’s pricing is known.

NPK and NK aftercut compounds and blends are being offered at competitive prices as blenders try to destock ahead of the new season.