As mentioned in Fertiliser Focus on 4th May, the European market is the next indicator as to the direction of travel for A.N. Last week Yara released its’ French Granular 33.5N new season prices. At a sobering € 305/mt Bulk delivered, this is some € 75/mt higher than the launch price in May 2020. To put this in a UK perspective, namely 34.5N bags delivered, this equates to just under £ 280/mt. A starting price at this level in the UK would represent over £ 80/mt above the launch price from last season. Key to this will be whether grain markets can sustain the price levels that have been seen since January. Then careful analysis of Break-Even Ratios may be needed to assess the new season price when it does launch here. Current levels at the recent CF spot price increase put prices circa £ 90/mt higher than June 2020. It remains to be seen how aggressive CF feel, and how generous they are with their delivery terms, will they offer a flexible June to September delivery at buyers’ option again?
Urea markets are still digesting the recent MMTC tender which closed on 4th May, this resulted in purchases of 550 K mt, significantly below the expectations of 1.5M mt. Reports suggest that the south west India monsoon rainfall will be normal. So, India will have to buy more. The questions at present are over whether shipping owners are prepared to take the quarantine requirements that come with cargoes to India at present. This was a key reason why less volumes were covered in this most recent tender. Some owners were not prepared to do that. Chinese producers, very aware of this held their ground fully prepared to wait until the next round in the expectation they will get the prices they need. India is in a very difficult position in the next few months, agricultural production is key to their economy and culture, domestic urea production is highly likely to suffer some shutdowns if the Covid crisis there is not brought under control soon. From a UK perspective we always look to Egypt as this is the main country of origin for Urea to UK. Evidently 100K mt has been sold by Egypt over the last few weeks. A large part of this will have been to the Indian tender, if China do participate more next time, then Egypt may not feature as much, but for the moment Urea prices from a UK perspective are still very bullish.
Enquiries from growers looking to make the switch to liquid fertilisers are increasing again, as plans are being made for spring 2022. COFCO are well placed with tank deals to suit everyone from 50m3 or 30m3. For a discussion on benefits, products and tanks call your Farm Trader or Russ Davison on 07825 925485.
Economic Data as at close on Friday 14th May v (7th May 2021) £ = $ 1.4096 ($1.3982) £ = € 1.1607 (€ 1.1498) Crude Oil = $ 68.83 ($ 68.27) Natural Gas =$ 2.97 ($3.00) Please treat pricing on graphs as a guide, please use quote request form for an up-to-date price.