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Gleadell: Supply Crunch Pushes Urea Price Higher

16 September 2011

GLOBAL - The urea market still continues to firm and has moved up yet again, so despite light trading prices many areas have now reached their highest point of the year.

Fueling these price rises, mostly in Egypt, is the view that October could well be a crunch month for supply. Rumours from China suggest that the export tax reference price will be raised again and that the government is considering a proposal to bring forward the end of the low export tax period from 31st October.

Crop prices are holding at attractive levels for farmers and this is sustaining fertiliser demand in most countries. Moreover there is a huge import requirement in Q4 in subsidized markets such as Pakistan, India and Bangladesh.

Collectively these countries require over 3m tonnes of urea to meet the needs of winter planting and covering this requirement without large volumes of Chinese urea will drive prices from other origins higher; potentially much higher than today.

Amomonium Nitrate

The underlying Ammonium Nitrate market remains very calm with wholesalers reporting lower demand than usual for AN in August, with the trend continuing into September.

Following last week's warnings the French market has seen an increase in its prices. Yara have increased by €22/tonne with immediate effect and these prices will soon be reflected in the UK seeing levels at circa £360 tonne delivered to the farm.

Phosphate

The Phosphate market remains firm and interest in TSP, DAP and autumn blended grades continue as drilling is now in full flow.

Gleadell continue to monitor demand and currently have Lithan 34.4 per cent, Granular Urea 46 per cent, and prilled urea 46 per cent, DAP 18N-46P and Granular 24N-28S03 available for delivery during September / October and November. Please contact your Gleadell Farm Trader for details.

TheCropSite News Desk



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