Gleadell Fertiliser Market Report - 16/09/2011

UREA

The Urea market still continues to firm and has moved up yet again so, despite light trading prices, many areas have now reached their highest point of the year.

Fuelling these price rises, mostly in Egypt, is the view that October could well be a crunch month for supply. Rumours from China suggest that the export tax reference price will be raised again and that the government is considering a proposal to bring forward the end of the low export tax period from 31st October.

Crop prices are holding at attractive levels for farmers and this is sustaining fertiliser demand in most countries. Moreover, there is a huge import requirement in Q4 in subsidised markets such as Pakistan, India and Bangladesh.

Collectively, these countries require over 3mln tonnes of Urea to meet the needs of winter planting, and covering this requirement without large volumes of Chinese Urea will drive prices from other origins higher - potentially much higher than today.

AMMONIUM NITRATE

The underlying Ammonium Nitrate market remains very calm with wholesalers reporting lower demand than usual for AN in August, with the trend continuing into September.

Following last week’s warnings, the French market has seen an increase in its prices. Yara have increased by €22/tonne with immediate effect and these prices will soon be reflected in the UK, to see levels at circa £360 tonne delivered to the farm.

PHOSPHATE

The Phosphate market remains firm and interest in TSP, DAP and autumn blended grades continue as drilling is now in full flow.