Higher grain prices stimulate fertiliser demand

When harvest approaches and the salesmen go on holiday, the fertiliser market usually sleeps – but not this year.

Rising grain prices have stimulated a second surge of fertiliser buying ahead of anticipated price rises. Imported nitrogen is already in line with domestic prices with little product on

offer. Later cargoes of imported ammonium nitrate (AN) look like being £225/t or more on-farm in the autumn. Urea prices cover quite a range from £235/t to £275/t for later cargoes and the

market is facing upward pressure.

GrowHow UK, Britain’s sole producer of AN, has so far resisted the pressure to deviate from its original price structure, but with only the first half of September’s planned production

committed it seems almost inevitable that an upward adjustment will take place for the latter half. A retail price of £225/t seems most likely with £229/t for October.

Potash prices have now emerged from a quirky period of “low” pricing around £305/t and are now nudging upwards once more, while phosphate remains stable.

Welcome rain in the north has stimulated grass growth and this, coupled with the anticipation of higher winter feed costs, has encouraged the purchase of NPK. Compound fertiliser prices

remain stable.

These price changes, such as they are, are stimulated entirely by demand.

Yara, the world’s largest producer, reports that the new fertiliser season has had a promising start. Global nitrogen prices have increased with demand and European nitrate prices started

substantially higher than at the beginning of the previous season, supported by low stocks. Fertiliser margins improved as nitrate prices were up 13% compared with last year.

Meanwhile, CF Industries, the world’s second largest producer, holds a similar bullish point of view, albeit perhaps from a more North American rather than global perspective. This is

reassuring for the future of AN production in the UK, at least in the short term.

*All prices based on 24t loads for cash payment the month following. Prices for smaller loads and 50kg bags will vary considerably.