Grassland Agro is confirming that retail standard urea price this week is around €850-860/t in 500kg bags on pallets, and stocks seem to be available countrywide at present.
Company managing director Liam Woulfe told Agriland: “We do not have a CAN [calcium ammonium nitrate] option at the present time. Fertiliser sales are currently only at around 20% of where they would normally be at this time of the year.
“Yes, there is the expectation of cheaper nitrogen becoming a reality during the second quarter of 2023. But importers must first sell-on the stocks they have in order to be able to obtain supplies for the normal peak application season of April over the coming weeks and months.”
Woulfe ruled out the possibility of fertiliser companies cutting nitrogen prices now, simply to get existing stocks through the system.
“Our approach will be consistent with every other year regarding stock which is the ‘first-in/first-out’ approach,” he continued.
“And whether cost prices go up or down, the next consignments will be priced accordingly. This is a massively working capital intensive industry and to have a different approach would be crazy, operationally and financially.
“Like all other industries, fertiliser stocks must be sold at a price that reflects their supply chain cost.
“At this time, it’s very difficult to see how importers like us can live with the risk of increasing their current inventories that is currently tied up as it is already at an unsustainable level and cannot be increased further,” Woulfe said.
Supply chain difficulties for fertiliser
Woulfe told Agriland that he can foresee serious supply chain disruptions between now and the end of April because even though stocks exist currently, he said that there is not enough committed in the pipeline to cover late-March and April.
“The time lag from purchasing new product and the arrival time of same, versus the peak application season, is getting very tight indeed,” he stressed,
According to Woulfe, urea sales may well increase in relative terms this year again.
“Up to now urea has accounted for about 10-20% of total nitrogen sales in Ireland. This figure may well rise to 30% + in 2023,” he explained
“There is every indication that farmers will opt for a combination of slurry and urea up to early March, after which, the market may switch to NPKs beyond that point.”
Protected urea
Protected urea is available at the present time. The advice is that farmers should budget for an additional cost of €70/t if using this product.
Protected urea is almost always best value per unit of N versus any other source of N and is optimal from an emissions point of view.
The Grassland Agro representative recognises that farmers using urea for the first time may have to recalibrate their fertiliser spreaders.
“However, most modern spreaders can be easily reset automatically in this regard,” Woulfe said.
Looking ahead, Liam Woulfe suggested that international fertiliser nitrogen prices could increase over the coming weeks due to ‘pipeline filling’ across Europe, before probably dropping back again.
“This could act to reduce the availability of supply coming into Ireland and cause supply disruptions,” he commented.
There are adequate stocks of potash (K) and phosphate (P) available to importers at the present time.
But this could change as the European market picks up and especially because of the many fewer suppliers of P and K at this time due to the Russian invasion of Ukraine, and its consequences.
“Both P and K prices strengthened last August,” Woulfe confirmed. “But they have now dropped back to the similar levels that farmers were paying this time last year.”