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Tuesday, June 18, 2024

Fertiliser worth sky-high as Ukraine battle worsens vitality fears

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Sky-high costs put quotes for ammonium nitrate (AN) at wherever between £850 and £1,000/t this week, alongside concern concerning the safety of fertiliser provides already contracted and producers’ means to proceed manufacturing.

European fuel costs hit a brand new excessive at the beginning of this week, reaching greater than double the extent which stopped manufacturing at CF’s Billingham plant final autumn.

Yara briefly lower manufacturing at nitrogen vegetation in Italy and France this week because of fuel costs.

The 2 vegetation have a mixed annual capability of 1m tonnes of ammonia and 900,000t of urea, and the transfer takes the corporate’s ammonia and urea manufacturing to about 45% of capability, when taken with the measures already in place at different vegetation.

See additionally: Tax and cash administration ideas for diversified farm companies

Producers in different international locations – together with Turkey, which exports calcium ammonium nitrate to the UK – have additionally stopped manufacturing.

A CF Fertilisers assertion to Farmers Weekly stated: “There was no change to CF Industries’ operational standing within the UK. The Billingham complicated is on-line and producing ammonia, nitric acid, ammonium nitrate and carbon dioxide.

“We proceed to watch vitality market situations and to have conversations with clients concerning the present business setting.”

Retailers have been anticipating new phrases from CF midweek, however weren’t satisfied these would materialise.

Pricing and provide are all over, in a market that adjustments by the minute. Imported AN was seemingly out there at £850-£870/t midweek, whereas urea was supplied within the excessive £800s/t, though presents have been few and much between on each.

Belarus and Russia account for nearly 40% of worldwide potash manufacturing, with each now topic to sanctions.

Russian vessels have been banned from UK ports and whereas Russian product can come into the UK below different flags, many customers are self-sanctioning and refusing Russian items, in accordance with Julia Meehan, of commodity analyst ICIS.

Difficult logistics

She added that logistics are proving difficult, with ship house owners refusing to name at Russian ports for concern of being additional sanctioned. Insurance coverage prices and cost difficulties are additional complicating commerce.

Port authorities have known as for presidency assist to determine blacklisted vessels.

Russia accounts for about 20% of the UK urea market and in 2021 was the nation’s third-largest provider. The UK additionally imports phosphates and AN from Russia, however in far smaller portions.

Ammonia hit a brand new document excessive which was effectively above the earlier worth disaster of 2008.

“It’s horrible all spherical and really critical,” stated Ms Meehan. “Brazil is a serious importer and Nigeria a serious producer.

“In Brazil, there aren’t any urea presents as sellers are uncertain the best way to worth product, whereas consumers are involved about provide and affordability points sooner or later. Costs have jumped as a lot as 70% in some areas over the previous few weeks.

“Plant shutdowns are doubtless on hovering vitality prices, together with in Nigeria.”

Grain

Farmers Weekly’s personal ex-farm worth survey this week recorded a spot feed wheat common of £283/t, up £16 on the week, following an increase of about £8/t the earlier week.

The regional vary of £275/t to £301/t displays the scarcity within the North, with the highest finish of the vary in Northumberland and the Borders, whereas a number of areas have been unwilling to cite a March worth.  

Oilseed rape

Anybody with oilseed rape to promote might make effectively above £700/t midweek. The typical at £723/t ex-farm for March was an increase of greater than £60/t in every week, with oil costs the primary push. Nonetheless, United Oilseeds stated an obvious push by China to safe shares of all commodities was additionally a possible issue.



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