Fertiliser Focus – 3rd August 2020

Urea

Confusion reigned in Urea markets last week as India’s attempts to secure product continued. The source of the turmoil was whether India would be able to source product from China. At the start of the most recent tender process, it seemed that India would not be able to source Chinese product. This was thought to be due to political tensions around the Galwan Valley dispute where armed clashes took place in June between Chinese and Indian troops. This sent the market into a frenzy and prices moving up rapidly. Towards the end of the week, and as the tender was due to close, India then confirmed Chinese material was acceptable.  With the benefit of hindsight, the volumes of Urea that India still need to buy, product from China is essential, plus whether in military terms or trading terms any conflict with China is likely to produce only one winner. So, at the end of a turbulent week, it seems India have bought circa 750k tonnes of product, and even with the confirmation of Chinese tonnes, China will be shipping less than half of that tonnage, this is still not enough and immediately sparked yet another tender for September shipment. The impact on the market of all this resulted in prices up by around $10-15/t. India have been trying to reduce their reliance on China as a supplier of fertiliser, Urea in particular by investing in upgrades to existing plants, and new facilities, all this takes time however but is worth watching for the future.                                       

Ammonium Nitrate 

As reported in Fertiliser Focus last week, UK producers withdrew terms on 24^th July, with all the volatility in the Urea market last week, and the lack of enquiries from the UK market due to harvest, terms were only released again on Friday 31^st July. August terms were posted at a £6/t increase, then £7/t for September and £8/t for October. This would put October prices somewhere in the region of          £ 220/t, not far from the target figure discussed last week of £ 225/t and still below the low point from 2019/20. Imported material is available in a  small number of ports in the UK, but not quite at the volumes that may have been seen in recent years.

Potash Development Association

The Potash Development Association recently released data which shows ‘Record Rainfall Impacts Soil Nutrient Levels’. Potash is classed as slightly mobile compared to Nitrate and Sulphate which are classed as mobile. When there is sufficient soil moisture for leaching to occur, dissolved nutrients can be carried away with the water in drainage and lost from the soil profile. Samples recorded for 2020 show some significant differences in both soil and tissue K levels across both arable and grassland compared with 2019. For full details click on the link below:-

https://www.pda.org.uk/record-rainfall-impacts-soil-nutrient-levels/