Fertilizer Supply Update – The Cupboard is getting bare!
Nothing, of late, is more disheartening than that “ping” of a new email with the subject of “Nitrogen Report”; and today hasn’t disappointed on that front. With an enormous intake of breath, I have to tell you that Yara, have increased their nitrogen prices to France, and most of mainland Europe by ~€165/tonne this morning; bearing in mind their last increase was on 4th October. Further announcements of production cuts are bringing little hope of any stability for prices of UAN, AN, Urea. Additionally, as we said some weeks ago, the N value within DAP (18:46:0) has become appealing with growers (global) opting in meaning that price is pushing higher too. Urea prices have reached highs that are staggering the trade. India, tendering last week, was only able to buy 750,000 tonnes (50%) of their requirement with this being sourced, mainly, from China. The significance of this is whether or not Egypt is giving the market a signal that no more immediate tonnes were available. Of course, this means India will have to enter the market for their remaining 750,000 tonnes and at a cost circa $800/tonne just to get onto a vessel, then there’s more price pain to come. For the UK, there is very little product being offered to importers and that’s a serious concern. MOP, for the first time in quite some months, is set to firm up; the basis? “Simply because it can”. However, whether this will result in a stand-off between suppliers and consumers, we wait to see. But,will waiting until Spring be rewarded with better prices? I simply cannot tell you.
You will have read in the press how Russia could intervene over gas supplies; I will leave the politicians to speculate on that but, even if the supply were to be increased, this may take some time to materialise during the coldest months of the year.
This week will be the end of the Government subsidised CO2 run; my quick calculations, based on current gas costs, would suggest AN with the potential to start with a £6** if production were to resume.
Whatever the outcome of this, I do want to be clear that , while we are focussed on CF in the UK, other fertilizer producers across Europe and further afield, have also cut production too; it’s important to keep that in balance.
CF have been delivering product; at least 1000 tonnes has arrived onto Member farms over the last 2 weeks across N & NS grades.