Fertiliser Market Report - 8th February 2013

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

Urea

Last week we saw Urea prices move sharply higher, Algeria are not exporting and the documented problems in Egypt rumble on. Granular Urea is extremely tight everywhere.

European buyers keep accepting and paying the higher prices and the United States have also started raising its tolerance levels, so we now have a battle on our hands between European and US buyers desperate to secure tonnage. Producers have limited tonnage available and know they can move values higher still so Feb/March prices will stay firm.

Ammonium Nitrate/ Sulphur

Both nitrate and sulphate prices remain firm. For imported nitrate, heavy domestic movement is limiting availability from the FSU countries and producers are now talking values upwards for February/March shipments. The current strength of the € versus the UK £ is also firming imports, over the last month this has added £8-9 tonne on replacement tonnes. Further price gains for both products are expected in February. This will be assisted by the strength of urea so while GrowHow continue to hold pricing, new terms for February/March are expected.

Potash

Finally, India have secured their Potash requirements for the approaching season following confirmation that IPL - which is the sole entrusted agency for import, handling, promotion and marketing of Potash in India have concluded a contract for 1 MT.

It has been concluded at a level which means the prices we have seen in the UK over the last few weeks are not sustainable. The market which has continued to drift downwards has now found the floor and so prices will rise from here. This is a clear signal for any UK and international buyers to now enter the market.

Phosphates

The potential for a rebound in pricing is emerging with India currently in negotiations for February/March requirements and the strength in other areas. India is expected to buy important quantities and, once this business is concluded, buyers elsewhere normally rush in to replenish their stocks also. The weak pricing over the last four months has meant that buyers have sat out and so all are running low stocks, so potential demand is significant.

Chile, Peru, Mexico and notably Brazil (soybean season) will all be significant buyers in the next three months. We will see a price increase, so Phosphate buyers should be considering buying today with values at a three year low. With the current strength of N Min and the potential now established for Potash and, Phosphate to rise, with a large spring cropping planned all NPK prices should be considered today.