20/11/07--FERTILISER OUTLOOK: Nitrogen Market Continues Exceptionally Tight

The returns achieved around the world for urea, UAN and AN, are significantly higher than the prices seen in the UK, suggesting competition will be fierce for product during the remainder of the season.

It would be easy to presume a fertiliser industry profiteering on recent grain prices, but the reality is a growing shortage of product against increased global demand (1m tonnes extra required in the EU alone by taking out set a side). The higher prices have further been compounded by increased production and freight costs.

To add to the availability problems, the rising price of urea may result in no more shipments this season for agricultural use. Traders may deem the financial risks too high to fix the size of vessel required for granular urea. The sale of the last stock of granular urea in the £230’s (bags deld), is a long way off the earlier sales in the £180’s which are currently, or still to be delivered.

Therefore, all things considered, the only viable alternative may be the very limited amount of AN anticipated from Lithuania and Poland. These origins may also become unavailable due to the global demand and their own domestic markets.

We need look no further than the phosphate and potash markets, almost double the prices of last season, to see the potential of where nitrogen prices may go. It sounds unbelievable, but £200/tonne for AN may look a good price for this spring.

Simon Sands – SJS Agriculture Ltd – For prices call 01724 279924 Anytime Quoting Ref: Agtrader

Dealing in quality guaranteed Fertilisers. AN – Granular & Prilled Urea – Blends – Straights