Global impact keeping UK fertiliser AN prices steady

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UK nitrogen prices have seen a 40 to 50% increase compared to July 2016. This is largely due to global factors, especially urea pricing.

Wynnstay fertiliser manager, Dave Mitchell explains that nitrogen prices have risen over the past 12 months as urea demand has affected the price of Ammonium Nitrate (AN) – the product predominately used for nitrogen fertiliser in the UK.

Dave continues, “The recent surge in urea prices has been influenced significantly by the activity of three key global players; China, India and the USA.

“For example, China has seen a considerable drop in their own urea production, leading to a swing from exporting four to five million tonnes of product last year to possibly becoming an importer this year. This had created an unexpected deficit in their urea supply, contributing to the upwards movement of urea prices.

“At the moment, the market is also waiting for India to make a second purchase of urea product this season, which could equate to as much as one million tonnes, again putting pressure on overall supply worldwide.

“This pressure has been accentuated by the USA’s lower than expected production volumes. Their overall domestic production of urea will be lower than previously predicted due to delays in opening new plants which means that they will be much more reliant on imports to fulfil any shortfall in product.”

Although these factors have led to an increase in AN prices for growers in the UK, Dave highlights that it is worth noting that UK produced AN is competitively priced compared to European product.

“Nitrogen is not as cheap as it has been in recent months. However, in comparison to European AN product, the UK market is steady and providing competitive prices on-farm,” he adds.

“My advice to growers would be to look at purchasing nitrogen soon, if you haven’t done so already.

“There is one producer of AN product in the UK and as peak season hits, there is always a high demand, therefore it’s advisable to get product in the shed. This means that it is on-site, ready to be applied when the time is right. And, with the unpredictability of the weather, it’s better to plan in advance, so optimum application timings aren’t missed, which could impact crop growth later in the season,” he adds.

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