Fertilisers

    Markets for new season nitrogen fertiliser opened early this year with a flurry of activity as imported ammonium nitrate (AN) was offered at around £280–£285 per tonne.

    Based on the price of urea, another key import, which remains strongly priced as a result of demand and activity in India, imported AN has looked good value and some have been tempted to buy early, for delivery later in the summer.

    Whether the price of urea will come down over the next few weeks will be strongly influenced by when India tenders again for product; a delay until late June may see buying opportunities in the UK.
    The major UK AN market has also now opened, with prices quoted at around £295–£300 per tonne for June delivery. On average this represents an opening price £15–£20 per tonne below last year, and priced to compete with imports.

    The general view is that global AN prices are staying high because manufacturers have been unable to build up stocks in advance of the new season campaign, owing to the cold late spring, which maintained demand throughout April and May.

    Reading the market and getting the right product at the right price is a challenge for growers. Last year’s market saw an opening price increase of £100 per tonne compared with 2010, strengthening further before falling back in spring. The range of prices paid for the same product was wide, and no doubt buyers are now eyeing the market with caution.

    What we do know is that, as far as nitrogen is concerned, there is no alternative; the question is, when do you buy it? Linking fertiliser purchases with current forward wheat prices may be a sensible management strategy, as the link between the two appears strong.
    The prospects for phosphate fertiliser remain firm, with a burst of global activity and shippers making purchases for the later part of the year with expectation that prices will become incresingly firm.

     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973