Fertilizer Update – 14-03-2022

Dear Members,

Over the last week, reports would seem to suggest that some growers around the UK have sought to secure part of their fertilizer for use in 2023.  A few members have followed this pattern and, time will tell whether the decision proves to be correct.

Today, Nitram is available @£905/tonne for March delivery, Urea can be bought for April, or on a July to December (sellers call option). The volatility in the respective fertilizer markets means I simply cannot judge where prices are heading.  Certainly, the interview with the global CEO of Yara and the subsequent article regarding shortages from The Telegraph, created a surge of buying demand particularly from those selling grain.

AHDB have revised their fertilizer advice again (8/3/22) click here to go to that page.

A number of key actions took place over the last week, all fuelling the dramatic rise in prices.

1. Ukraine bans all export of fertilizer to support their own growers.
2. Yara terminated ammonia contracts with Russia which supplied 75,000/t per month ex Russia.
3. Yara cut ammonia and urea production in Europe to about 45% of capacity.
4. BASF halted supply of sulphur based fertilizers to European plants owned by Russian based Eurochem.
5. Polish fertilizer company supplying NPK’s called “force majeure” (not impacting UK).
6. Borealis (large fert producer) rejected the bid by Eurochem to buy their business despite previous agreement.
7. North African / Egyptian urea producers raising prices to fill product voids for Russian product.
8. Increasing refusal by shipping companies to enter the Black Sea area due to conflict.
9. Shortage of DAP forcing blenders to alter blend analysis to use less phosphates.

International urea prices leapt last week as buyers hurried to secure tonnage against the backdrop of the Ukraine conflict.  While there is little doubt, sanctions against Russia (fertilizer) are painful, it is not preventing Russia from continuing to trade with their list of “friendly” countries.  As you would expect, buyers are competing against each other now to secure products from elsewhere; further inflating prices to unprecedented global levels.

Phosphate buyers in Argentina and Brazil have entered the market on the back of supply concerns for their upcoming seasons.  Expect these to continue to rise.  Importers in the UK are looking towards North African supply routes presently.

Potash prices continue to rise and securing supplies, particularly for those who were Russian buyers, is taking place.

Overall, there is little, at this moment, to suggest anything other than price volatility with constraints on supply.

Heather Claridge
Fertilizer Sector Head

Heather Claridge
Fertilizer Sector Head