Fertiliser Focus – 25th November 2019

Urea 

All eyes were on the results of the most recent Indian tender this week. In one of the largest ever awards some 1.8M tonnes has reportedly been purchased, this comes on the back of 1M tonnes in October. This takes India’s purchasing in the second half of 2019 up to the 5.5M tonnes level. Whilst Chinese producers have played a much larger part in 2019 compared to 2018, of interest to the U.K market is that North African producers are expected to supply a larger proportion of this latest tender. This is important as most of the Granular Urea shipped to the U.K comes from North African countries such as Algeria and Egypt. As well as the volumes bought the impact on the market price will be the next issue, China’s return to the export market and slow global demand has resulted in falling prices, from the manufacturers perspective they will hope this latest tender award will put a floor to the market. The UK’s ability to capitalise on the price reduction will depend on the current stock levels, more product is needed to be shipped to the UK, quite when? is another matter.

AIC Survey

A.I.C the Agricultural Industries Confederation explained in a speech given recently that the Fertiliser sector has better public support than was previously thought. Despite criticism from environmental pressure groups, the role of the fertiliser industry is understood and appreciated by the general public. In a survey of over 1,000 members of the public over two-thirds agreed that fertilisers are essential in producing high quality food at a reasonable price. In another question 80% agreed it was necessary to replace goodness in the soil when plants are harvested.

CF Industries Holdings Inc

Based in Deerfield, Illinois CF Industries Holdings Inc which was founded in 1946 as The Central Farmers Fertilizer Company have recently published their third quarter results. Net earnings (which represent the amount of sales revenue left over after all operating expenses, interest, taxes and some stock dividends) are up to $438M from $241M for the same period for 2018.  CF expects that there will be demand growth for Nitrogen over the next four years, but that any new capacity in production will fall short of this growth given the limited number of facilities under construction. CF Fertilisers UK Limited is the UK based business owned by              CF Industries Holdings Inc since 2015, prior to this it was known as GrowHow UK Limited and had been a joint venture company since 2006 latterly between Yara and CF since 2010.