All posts by Steve Seay

WinField Merges with NIK Marketing

Land O’Lakes Inc.’s WinField United Crop Nutrients business, Ames, Iowa, has completed a merger with NIK Marketing, Kearney, Neb. WinField said the merger brings together two teams committed to providing industry-leading market intelligence services and supply chain alternatives for fertilizers to independent and cooperative retailers.

WinField United, the crop inputs business of Land O’Lakes, works with nearly 1,300 locally owned and operated cooperative and independent agricultural retailers. The NIK Marketing team will continue current operations in the Kearney office as part of this merger.

ICL UK Halt Potash Production in June 2018

Israel Chemical Ltd.’s United Kingdom operations have announced plans to cease potash production at the Boulby mine at the end of June 2018. The mine will remain in operation focusing on the development of polysulfate mining as well as salt. Some 230 workers are expected to lose their jobs with the idled potash production.

ICL has been planning to eventually stop potash mining in favor of polysulfate. The company cited continuing losses at the site.

Wheat Growers Buy Gavilon Facility

South Dakota Wheat Growers, Aberdeen, S.D., announced Jan. 2 that it has purchased the 40,000 st dry fertilizer plant in Kimball, S.D., that had been owned by Gavilon Fertilizer LLC.

With this purchase, the Kimball plant will become the largest capacity dry fertilizer plant in the Wheat Growers cooperative. Wheat Growers currently has six hub fertilizer plants located in Bath, Huron, Kennebec, McLaughlin, Oakes and Wolsey, with the largest being Wolsey with 31,200 st of dry fertilizer storage.

The Kimball plant includes access to a 110-car unit loop-track, plus high-speed automated fertilizer loadout and storage capabilities.

“The Kimball fertilizer plant has three times the storage capacity as our newest plant in Kennebec,” Chief Operating Officer John Husk said. “With this added storage volume and efficient loading capabilities, we can provide our customers seamless delivery of cost-effective product for their operations.”

Gavilon Grain LLC, which is based in Omaha, Neb., will continue to own and operate the adjacent 2.2-million-bushel grain elevator.

PotashCorp, Agrium Merger Complete

Nutrien Ltd. on Jan. 2 announced the successful completion of the merger of equals between Agrium Inc. and Potash Corp. of Saskatchewan Inc. Nutrien has the largest crop nutrient production portfolio combined with a global retail distribution network that includes more than 1,500 farm retail centers. The company has nearly 20,000 employees – and operations and investments in 14 countries.

Mosaic, Vale Modify Agreement

The Mosaic Co. on Jan. 2 announced modifications to the definitive agreement with Vale SA, including reduced consideration for the acquisition of Vale Fertilizantes. The changes include: a reduction in the purchase price consideration to $1.15 billion in cash and 34.2 million shares of The Mosaic Co. common stock; Vale will retain equity ownership in the TIPLAM port and Mosaic will continue to have the right to use the TIPLAM port facility in accordance with commercial arrangements entered into between the parties.

“Our conviction in the long-term outlook for the business and the promise of Brazil has not changed,” said Joc O’Rourke, president and CEO. “We look forward to completing the transaction and working to realize the exceptional opportunity this acquisition presents.”

The transaction is expected to close on or about Jan. 8, 2018.

Initially, Mosaic Co. agreed to buy Vale SA’s fertilizer unit for $2.5 billion in cash and stock.

NFL Issues Urea Awards at Lower Prices

National Fertilizer Ltd. issued awards totaling 387,000 mt at prices slightly below the lowest offer in the tender. East Coast prices dropped to $262.89/mt CFR and the West Coast to $258.88/mt CFR.

The lowest offers in the tender were by Eastern Commodity at $263.03 for the East Coast and $259.02/mt CFR for the West Coast.

The awards went to three companies – Eastern Commodity, Transagri and Comzest. All tonnage reportedly is coming from Iran. Sources said lower prices came because Iran was anxious to liquidate its stockpiles to help move up market prices. One source noted the Iranian focus on India meant no Persian tons were available for an Ethiopia tender that closed this week.

The awards still leave India about 120,000 mt short of what sources said the country needs to end the current season and have enough on hand to start the next.

The awarded product must be shipped by Jan. 20.

ADNOC, OCP Ink Long-Term Sulfur Supply Deal

The Abu Dhabi National Oil Co. (ADNOC) and the OCP Group of Morocco (OCP) have announced the signing of a long-term sales agreement whereby ADNOC will supply OCP with granulated sulfur.

Under the agreement, ADNOC, the world’s largest exporter of sulfur, will steadily supply OCP, the largest worldwide sulfur importer, until 2025. The two parties agreed to consider a gradual increase of the contracted annual volumes. ADNOC exported more than 2 million mt of granulated sulfur to Morocco in 2016.

“Since 2008, OCP has initiated the largest investment program in the fertilizer industry with the objective of doubling its mining capacity and tripling its fertilizer capacity,” said Mustapha El Ouafi, OCP managing director. “Our ambitious program will see OCP further strengthen its position as the world’s largest fertilizer producer and a leading player in the agribusiness value chain. As such, we are committed to further developing a reliable and strategic partnership with ADNOC, the world’s largest sulfur exporter.”

ADNOC and partners produce more than 6 million mt of sulfur annually, exporting it to customers from its handling facilities in Ruwais. The amount of sulfur available for export will increase over the next decade as ADNOC and partners brings new sour gas projects on line, as part of its plans to achieve gas self-sufficiency by 2030.

OCI Increases Stake in OCI Partners

OCI NV has agreed to acquire 7.3 million common units of OCI Partners LP at a total cost of $61 million, implying $8.40 per common unit. The units are being purchased from certain minority unitholders in privately negotiated transactions and represent 8.4 percent of total issued and outstanding common units of OCI Partners. OCI NV expected to complete the acquisition of the units Dec. 27, 2017. Following the transaction, OCI’s ownership in OCI Partners would stand at 88.25 percent.

More Details Released on NFL Tender

The full set of prices in the NFL tender were released after Green Markets went to press Dec. 22. Initial reports showed a low price for the West Coast of $259.29/mt CFR by Eastern Commodity. The final numbers in India’s NFL tender showed that Eastern Commodity offered 45,000 mt at $259.02/mt CFR for deliver to Rozy on the West Coast. The lowest price for the East Coast also came from Eastern Commodity at $263.03/mt CFR into Tuticorin with 30,000 mt.

Sources said negotiations for other companies to match the Eastern Commodity prices could be delayed until Dec. 26 to allow for the Christmas holiday.

Going into the tender industry watchers were expecting to see prices in the upper $250s/mt CFR and the low $260s/mt CFR. In the end, the prices skewed to the upper $260s/mt FOB. The average offering price was $267/mt CFR.

India is reported to be at least 500,000 mt short of closing out the current season. Sources said NFL would most likely try for 700,000 mt if the price was right. One trader said, as the tender numbers started coming in that same Iranian tons may have been offered by more than one trading house. This could mean, he said, there might not be enough tons offered in this tender to cover the country’s needs.

Sources said if a new tender is called in January to fill out the needed tons, the buyers should expect prices to move back into the $280s/mt CFR, a range that previously caused NFL to scrap an earlier tender.

Agrium Unit Settles Case with DOJ

Agrium Inc., Calgary, announced Dec. 21 that Crop Production Services, Loveland, Colo., the retail business unit of Agrium, recently settled with the U.S. Department of Justice over claims that CPS discriminated against U.S. workers to fill a small number of temporary seasonal technician positions at its rice seed facility in Texas. These positions were filled under the previously used H-2A foreign workers visa program, the last time the program was used by the company was in 2016.

Agrium said CPS employs of over 10,000 U.S. employees which provide important crop input products, services and solutions to farmers across the United States.

Agrium said it is important to note that in the settlement agreement, CPS denies discriminating against U.S. workers and notes that it requested and received certification from the U.S. Department of Labor (in February of 2016) that no U.S. workers were qualified and available to fill the positions in question. It said CPS has always had a practice of hiring U.S. workers first and foremost in cases where a qualified candidate is available.