Fertiliser Market Report

Granular Urea internationally is still firm with producers comfortable with sales going into Jan 2011.

Despite the bad weather, UK stockholders continue to reduce physical stock with few new shipments entering the UK ports. Currently offers in the market are £10/£15 below replacement product.

• Prilled urea continues to track Granular Urea at around a £10 discount to Granular, with international demand in India and Pakistan still looking strong for first quarter 2011.

• Ammonium Nitrate stocks are still tight in Europe with Yara looking to lift up to 50,000mt from the UK in the spring to cover shortages in Southern France, caused by delayed start up of the Yara factory in Ambes. Growhow indicating they will continue to produce CAN for Irish market in early spring. All these factors will result in a firm spring pricing structure.

• Phosphate and Potash prices continue firm with NPK prices continuing to move forward steadily exacerbated by a firm nitrogen market, and blenders not being overly long as they view a hard pressed livestock sector who still have to purchase majority of their fertiliser for spring 2011. Questions arise as to whether this will be made of NPK, or straights plus N.

• Gleadell continue to have Lithan, Granular 16-16-16, Granular Urea, and Prilled Urea available for Jan 2011

Summary

• Most arable farmers were reluctant buyers in June due to low grain prices but, subsequently, with a dramatic improvement since and good drilling conditions, it is envisaged many arable buyers will be looking to top up in the spring. This situation, plus a large requirement in the stock areas still to be resolved, could cause logistic problems at some point in the spring as producers and merchants keep stocks at relatively low levels. As usual, the weather and the timing of the arrival of spring will be the final arbiter as to how orderly supply and demand will be addressed.