Fertiliser – looks like it pays to buy early

By Roger Chesher

INDICATIONS of the wisdom of buying nitrogen early are beginning to harden.

Domestic sales are starting to arrive on-farm, and some distributors are placing orders to cover tonnage for the future, signs of a feeling that prices will rise.

It is difficult to find significant tonnages of imported product far into the season.

Even though the extreme energy prices in the United States have reduced, it is doubtful whether the level will drop low enough to justify starting up American nitrogen plants in the near future.

Demand for imports into America is therefore likely to remain strong.

Add to this a high demand from France and the fact that our exchange rates do not favour the Russian producer, and one can understand why imports are so scarce.

Currently imports would be around 86/t FOL (free on lorry) which translates to 98/t on-farm.

With Russian producers feeling comfortable, why sell nitrogen cheaply if the price can be increased by reducing the quantities available?

UK producers are in a similar situation, as both Terra and Kemira now have the capacity to export ammonia, and have demonstrated their willingness to do so if the UK price is not competitive.

Although the UK farmer is sensitive to the price of nitrogen, we must remember that price rises here have been the lowest in Europe, and other markets will appear attractive to exporters.

The PK market is still quiet, with UK prices starting around 112-115/t for 0.24.24.

Irish markets are extremely quiet, with prices of nitrogen and compounds dropping at the end of the spot usage period, but remaining high in comparison to GB.

CURRENT PRICES

IRELAND

Forecast spring prices