Ottawa-Handing out what is described as the stiffest sentence since Canadian terrorism laws came into effect in 2001, an Ontario Superior Court justice imposed a life-in-jail sentence plus nine years on the man found guilty of being one of the “directing minds” in a terrorist group plotting to explode fertilizer bombs in Toronto. “The potential for loss of life existed on a scale never before seen in Canada,” the Canadian press reported Judge Bruce Durno saying, as he read aloud his 48-page decision. Durno described Zakaria Amara, 24, as the one who hatched nearly the entire plot of the Toronto 18 that the judge said would have resulted in “the most horrific crime Canada has ever seen.” Amara, who has been in custody since his arrest June 2, 2006, pleaded guilty on Oct. 8, 2009, to one count of “committing an indictable offense in association with a terrorist group, namely doing anything with intent to cause an explosion that was likely to cause serious bodily harm or death or was likely to cause serious damage to property contrary.” He also pleaded guilty to one count of “knowingly participating in or contributing to any activity of a terrorist group for the purpose of enhancing the ability of the terrorist group to facilitate or carry out a terrorist activity.” Amara has 30 days to decide whether he will appeal. He is reportedly eligible for parole in approximately six years. Judge Durno also sentenced Saad Gaya, 22, to 12 years for an offense under the anti-terrorism act. Police caught Saad Gaya and his friend Saad Khalid (already sentenced to 14 years) unloading fake fertilizer from a truck.
All posts by traceybg@gmail.com
Maryland investigates biosolids claims
Ocean City, Md.-No biosolids from the Ocean City Wastewater Treatment Plant are being used as fertilizer while state environmental investigators look into charges from environmental groups that the material is the source of increased contamination in a local waterway. “The Maryland Department of Environment has completed four inspections at Hudson Farm, and our program staff are now reviewing the findings internally to determine whether clean water act violations occurred and whether enforcement actions are warranted,” MDE spokeswoman Dawn Stoltzfus told Green Markets. She said the investigation stems from Waterkeepers Alliance findings that nearby water samples showed high levels of bacteria. The site was inspected by the water management administration on Dec. 18 and by the land management administration Dec. 21, 23, and Jan. 7. “When MDE does investigations such as this, our number one concern is to immediately stop any potential pollution,” Stoltzfus added. “To that end, actions were quickly taken to ensure that the existing Class A sewage sludge at Hudson Farm does not pollute waterways.” She said after the first inspection that all of the Class A sewage sludge on Hudson Farm was moved away from a drainage ditch, placed on higher ground, and put under protective cover. Straw bales were placed on the slightly downslope side of the new location to catch any incidental runoff. At the original site of the sludge storage pile, the owner graded the area and spread rye seed, covered the seeded area with straw, and placed straw bales around the downslope side to prevent any continued residual runoff. All of these actions ensured that the material was no longer in a position to possibly pollute waterways. “We can confirm that since Dec. 23 all Class A sludge from the Ocean City Wastewater Treatment Plant is being trucked to the Worcester County central landfill,” she reported. According to press reports, Assateague Coastkeeper, an on-the-water advocate for the coastal bays west of Ocean City and west of Assateague Island, and Waterkeepers Alliance have filed a 60-day notice of intent to bring a lawsuit against Hudson Farm and Perdue. Hudson is a grower for Perdue.
Oregon OSHA imposes $740,400 ammonia fine
Salem, Ore.-Oregon OSHA has fined Americold Logistics, the largest provider of temperature-controlled food distribution services in the country, nearly three-quarters of a million dollars in safety and health violation penalties for not having proper anhydrous ammonia safeguards in place to protect workers at its Milwaukie, Ore., location. “Ammonia carries significant risks to workers, particularly in large quantities,” said Michael Wood, Oregon OSHA administrator. “Due to the size of this facility, there is the potential for a large-scale release.” The company has 30 days to appeal the citations, which incurred a total fine of $740,400. Americold Logistics was cited for 10 willful violations, four serious repeat violations, and 22 other serious violations of the Oregon Safe Employment Act. The bulk of the violations are related to the company’s system for handling anhydrous ammonia. Among other issues, the inspection identified excessive ice build-up, creating the potential for system damage, and in some instances encasing valves, making it difficult, if not impossible, to close them in the event of an emergency. Significant corrosion of pipes and missing drain valve plugs were also identified, both of which inspectors said made ammonia release more likely. Oregon OSHA previously conducted an accident investigation at the Milwaukie location in 2007 after two employees were sent to the hospital following an ammonia compressor explosion. As a result of that inspection, which was limited in scope, 18 violations were issued.
Lebanon recognized for environmental excellence
Lebanon-Lebanon Seaboard Corp. was among those recognized by the New Jersey Department of Environmental Protection with a 2009 Governor’s Environmental Excellence Award. The Lebanon, Pa.-based company, which produces bionutritional and advanced fertilizers as well as a wide variety of consumer lawn and garden items, received the honor in recognition of reductions in the amount of phosphorus in lawn and garden fertilizer formulations. “The fertilizer industry has a responsibility to promote the conscientious and eco-friendly use of products that can affect the quality of water and our overall environment,” said Katherine Bishop, CEO and president of Lebanon Seaboard, which manufactures and distributes products that help professionals and homeowners care for turf and landscapes. “This initiative provided members of our industry an opportunity to continue to educate homeowners on the responsible and efficient use of fertilizers.” The Healthy Lawns/Healthy Environment Initiative focused on a statewide grassroots education movement that reached thousands of residents with practical and actionable lawn care stewardship information. The initiative was also credited with increasing awareness of the role of phosphorus in fertilizer products.
EPA runoff limits for Florida labeled as flawed
Gainesville, Fla.-Agriculture interests fear that strict new water regulations proposed Jan. 15 by the U.S. Environmental Protection Agency will levy a de facto water tax on Floridians by increasing water and sewer bills. The regulations could impose onerous economic burdens on farm operators as well. “For nearly a decade, Florida’s agricultural community has been proud to cooperate with other businesses and government agencies in the state’s Total Maximum Daily Loads program,” said Florida Farm Bureau President John Hoblick. “The TMDL program, which established numeric nutrient criteria based on watersheds, has caused Florida to be recognized as a national leader in water quality protection and restoration. This action by EPA abruptly changes that.” EPA’s proposed action, which the agency said was developed in collaboration with the state, would set a series of numeric limits on the amount of phosphorus and nitrogen that would be allowed in Florida’s lakes, rivers, streams, springs, and canals. EPA claims the standards will protect people’s health, aquatic life, and the long-term recreational uses of Florida’s waters. Hoblick responded that nearly 75 percent of Florida’s 2.1 million acres of irrigated farm land currently embraces voluntary agricultural Best Management Practices (BMPs). Agricultural BMPs are practical, cost-effective measures that agricultural producers implement to reduce the amount of pesticides, fertilizers, animal waste, and other pollutants entering water resources. Best Management Practices are designed to benefit water quality while maintaining or even enhancing agricultural production. The Farm Bureau believes EPA’s overly simplistic approach, which affects only Florida, is generalized and fundamentally flawed because it does not take into account the unique characteristics of each of the state’s rivers, streams, and estuaries. Experts say the EPA standards will brand pristine streams and lakes as impaired, requiring the state to spend billions of scarce dollars to meet the standard. In some cases no technology currently exists to meet the proposed federal regulations, as in the case of agricultural wastewater, according to Farm Bureau. “There is no way to calculate the time and expense involved in creating that technology,” Hoblick said. “Agriculture may simply be unable to bear those costs. That should be of great concern to every citizen in Florida because a reduced domestic food supply would ultimately push food costs upward.”
DEF market starting out lower than expected
Arlington, Va.-Industry participants are lowering their expectations for the 2010 diesel exhaust fluid market, which was pegged for starters as high as 60 million gallons, because of the impact of the recession and the uncertainty of truck owners. “DEF demand might hit 30 million or 40 million gallons in 2010,” predicted Dan Gilligan, president of the Petroleum Marketers Association of America. “If trucking companies advance-order the 2009 models without SCR – we’ve seen from past behavior they are leery of new technology and try to buy up existing inventory – the demand may be delayed until 2011.” Others in the industry agree. Rich Moskowitz, vice president of the American Trucking Association, cautioned that the new truck numbers for 2009 were down significantly and there hasn’t been a significant pre-buy in anticipation of the new 2010 engines and their associated price premiums. “But even in a bad year, 90,000 trucks will be purchased,” Moskowitz offered. “There will be demand for DEF, though maybe not as robust as initially estimated.” He added that the 2010 trucks with SCR, which sell at a $9,000 premium, promise more fuel efficiency, which may increase demand, since the fuel savings could help recoup that investment over time, depending on the price of DEF and diesel fuel and the number of miles traveled. Airgas, with its AiRx DEF handled through its specialty products division, is also expecting that the DEF market will be substantially smaller than projected by the Engine Manufacturers Assn. last year “We expect DEF demand to mirror recovery in the transportation industry, which continues to operate at below-normal volumes,” stated Jodi Crawford, Airgas DEF business development manager. “Industry analysts predict recovery in this segment to begin in mid-2010 with no substantial growth until 2011-2012.” Still, Crawford noted, early adopters of SCR technology soon will begin accepting delivery of SCR engines, signifying the beginning of this emerging market. Airgas currently has trailers dedicated to DEF transportation and is growing the infrastructure to supply the market. “We are making progress in rolling out our DEF infrastructure in three ways: expanding our warehouse network for packaged product, adding bulk storage capability to our national footprint, and supplying our own fleet with DEF,” she reported. Airgas declined to name its DEF suppliers.
Ammonium nitrate banned in Afghanistan
Kabul-On Jan. 22, President Hamid Karzai’s office was reported to have issued a decree banning the use, production, storage, purchase, or sale of ammonium nitrate. Investigations have shown that the product has been used by militants in recent bombings. Press reports say that according to Globalsecurity.org, a security think tank, some 95 percent of the terrorist bombs used in the country are made from ammonium nitrate. Farmers are being urged to switch to urea.
Wisconsin ban in effect on asphalt loading pads
Madison, Wisc.-Ag operators and mixers, loaders, and applicators are being reminded that asphalt mixing and loading pads can no longer be used. Revisions to Wisconsin’s fertilizer and bulk storage rules required the pads to be taken out of service by Dec. 31, 2009, according to officials with the Wisconsin Department of Agriculture, Trade and Consumer Protection. The department found that asphalt is too porous to effectively contain spills of liquid pesticides or fertilizers. “We’ve also found that some liquid pesticides will corrode the surface of the asphalt pad, which increases the risk of product seeping through the pad into the ground,” explained Mathew Laak, containment specialist with the department. If the asphalt pad is being taken out of service, Laak said, the area under and around the pad will need to be checked for environmental contamination at some point. This means samples of soil and groundwater must be taken and analyzed by an environmental lab to check for the presence and amounts of pesticides or fertilizers. If the laboratory analysis shows contamination under the asphalt pad, then the soil must be removed as part of an environmental cleanup. If a site cleanup is required, certain costs are eligible for reimbursement under the Agrichemical Cleanup Program. “We understand that many ag dealerships and facilities are affected by this difficult economy, so they may choose to leave the asphalt pads in-place but out-of-service,” Laak said. “Just be aware that if a pad is out of service for five years, a facility will still need to do an environmental assessment of the area under and around the pad to check for possible contamination.” A facility might be able to delay the costs of the environmental assessment right now, but they will still need to complete the environmental assessment in the future, Laak said. Another option for facilities with asphalt pads is to replace them with Portland cement concrete pads. Design plans for a new concrete pad must be submitted to the department, with written certification by a professional engineer, at least 21 days prior to construction.
Management Briefs
After 41 years with Land O’Lakes Inc., Dave Seehusen, executive vice president, Ag Business Development, is retiring effective March 5.
Viterra Inc. has appointed Rob Gordon as president, South East Asia, and Viterra senior vice-president. He will work with the management team to integrate and enhance the company’s Australian and New Zealand operations to achieve higher performance and optimal operating efficiencies, with a focus on superior service to growers and customers. In the longer term, he will also work with the global executive management team to identify and pursue further growth of Viterra’s presence in Australia, New Zealand, and South East Asia, consistent with Viterra’s overall plans for diversification and global growth.
Most recently, Gordon served as the CEO and managing director of Dairy Farmers Pty Ltd. in Sydney, leading its transformation from a farmer-owned co-operative to a leading Australian-branded consumer goods company. Prior to that, he was managing director for Goodman Fielder Consumer Foods Pty Ltd. The early part of his career was with Unilever, where he had various operational roles across the supply chain in the UK, mainland Europe, and Australia. Gordon’s appointment is effective immediately. He will report to Fran Malecha, chief operating officer, and will be based in Adelaide, Australia.
Market Watch
AMMONIA
U.S. Gulf/Tampa: Last week sellers were chatting up price ideas for Tampa ammonia for February. Everyone was expecting higher Tampa prices due to stronger international numbers. Also helping to boost prices were expectations there would be no excess tons available from Trinidad in February, as there have been for the past few months. The AUM UAN plant, expected up in November, and the ammonia that would have gone into that product, has instead moved into the market. As of last week, reports were that the UAN plant was still in startup mode.
January was done at $300/mt DEL. Most speculated that prices would go up $50-$70/mt more due to Yuzhnyy prices of around $300/mt FOB. However, on Friday came word of a PotashCorp sale of 10,000 mt to Transammonia at $375/mt DEL for mid-February, with the product going at Trammo’s option to Tampa or Pascagoula.
At press time, there was no word from large Tampa phosphate producers as to their new business for February. However, the PotashCorp-Trammo deal obviously gives sellers another argument for higher prices.
Eastern Cornbelt: The anhydrous ammonia market was quoted in a broad range at $395-$440/st FOB regional terminals, with the low for prompt tons on a spot basis and the upper end reflecting very limited spring prepay offers.
Western Cornbelt: The ammonia market continued to be quoted in a broad range at $360-$420/st FOB in the region, depending on location, with the low reported in Nebraska and the upper end in the Iowa and Missouri markets for spring prepay tons.
California: Anhydrous ammonia was steady at $480-$485/st truck-DEL and $515/st rail-DEL in the California market, with aqua ammonia listed at $132/st FOB. Sources said a price adjustment is likely again in early February.
Multiple storms dropped heavy rainfall in the state last week, along with plenty of snow in the Sierra. The plentiful moisture is good news for drought-weary farmers in the state. While some officials cautioned that much more is needed to pull the state out of its three-year drought cycle, others said the forecast bodes well for agriculture. “We could solve our drought problem here in the next three weeks,” said one source, who referred to the “Miracle March” in 1979 when state reservoirs were replenished in just one month after successive years of drought. “We will get a lot of rain and snow over the next month. If it happens, we’ll have everything filled up and then some by the first of March.”
Pacific Northwest: Anhydrous ammonia was tagged at $395-$425/st DEL in the region, with the low for railed tons and the upper end for truck-delivered product out of Ritzville, Wash. Those levels were down considerably from December postings that ranged from $480-$530/st DEL, depending on location.
Western Canada: The anhydrous ammonia market was quoted at $700-$750/mt DEL in the region, reflecting an increase of $35-$55/mt from last report. The low end of the range was reported on a spot basis in Manitoba, with the higher numbers in Alberta.
Black Sea: Demand remains strong enough around the world that producers can ask for higher prices for tons coming out of Yuzhnyy without seeming greedy.
Sources report that negotiations taking place in Tampa will set the netback price higher. As the week ended, Asian sources talked about $300/mt FOB coming out of Yuzhnyy. No one pointed to specific business.
Conventional wisdom has the market now sitting at $290-$300/mt FOB.
Middle East: A series of deals over the past week or so have moved up the price. A deal early last week at $310/mt FOB showed clearly that the low $300s/mt FOB as a price level was fading away. Later in the week, Mitsui did a $330/mt FOB deal with Qafco.
The next target, say producers, is $350/mt FOB. The Mitsui cargo is expected to head to the east coast of India.
Demand in Asia is helping keep prices east of the Suez Canal up. Any increase in Indian demand will push the price higher.
India: FACT closed its tender for its annual demand of ammonia. Sources say three companies – Qafco, PIC and Transammonia – offered in the tender.
Asian sources say no numbers were available at press time.
The tender was for 50-100,000 mt of ammonia for shipment in 7,500 mt lots per month. Depending on demand and supply, some of those shipments might have to be every 10-15 days.
FACT is asking the companies to extend the validity date of the offers to February 15.
Asian sources say no numbers were available at press time.
The move by FACT to long-term contracts will remove one steady barometer of prices from the Middle East.
Observers note that every two months FACT would come in for a public tender. The results of those tenders would provide a solid indicator of where buyers and sellers are settling on prices. Industry watcher would know that whatever price FACT settled on, other Indian buyers could expect to see an increase or reduction in their contracted prices with Middle East suppliers.
Until the annual contract is settled, FACT still needs ammonia.
The company closed a tender January 21 for 7,500 mt for delivery February 15-18. Validity on the offers is January 29.
Asian sources are speculating that FACT may try to talk
down the prices once the company opens the offers.
Asia: Buying remains steady and strong. Sources report that all of the major buyers in Taiwan and South Korea are asking their suppliers to include as many extra tons over the guaranteed quantity as possible.
Unfortunately for the buyers, sources say the suppliers are hard pressed to come up with the contracted minimum.
Production facilities in Indonesia and Malaysia are all said to be operating at full capacity, with no turnarounds planned for some time.
UREA
U.S. Gulf: Most players last week said a lack of demand was causing prices to fall. And there were concerns about falling corn prices. As a result, granular barges were reported to have moved at $317-$320/st FOB.
Eastern Cornbelt: Granular urea was unchanged at $355-$365/st FOB regional terminals to the dealer.
Western Cornbelt: The granular urea market remained at $350-$360/st FOB in the region, with the low reported in southern Missouri and the high reflecting dealer reference pricing from some regional suppliers. Agrium’s granular urea postings in the Northern Plains market firmed on Jan. 15 to $400/st FOB North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $405/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.
California: Granular urea remained as low as $370-$380/st FOB Stockton, Calif., but new postings were in effect at other locations that were significantly higher. Agrium’s granular urea postings firmed on Jan. 15 to $420/st FOB West Sacramento, $440/st truck-DEL in Central California, and $445/st truck-DEL in northern and desert areas of the state.
Pacific Northwest: Granular urea was reported in a broad range at $380-$420/st DEL, depending on location. Agrium’s granular urea postings firmed on Jan. 15 to $400-$415/st DEL in Montana and Wyoming, depending on location; $420/st FOB Idaho warehouses at Acequia and Pella, and Washington warehouses at Glade, Warden, and Wilson; $425/st DEL in Washington, Idaho, Oregon, and northern Nevada; $435/st DEL in northern and central Utah; and $440/st DEL in southern Utah. Those levels are up $20/st from Agrium’s Dec. 10 urea postings in the region.
Western Canada: Granular urea pricing to the dealer was pegged at $491-$516/mt DEL, up $20-$30/mt from last report, with the low again reported in Manitoba and high in Alberta. Dealer reference prices were pegged as high as $525/mt DEL in the region, depending on location.
Black Sea: Prices are edging up. And the industry is trying to figure out why. The main culprit, say sources in Asia, is Turkey. Turkish buyers have been making more inquiries lately for January and February loadings. These inquiries are enough to make producers feel comfortable for the next few weeks, but, said one trader; they are not enough to justify the steady rise that is taking place.
Usually when the market starts to move like this, major buyers such as India or Pakistan have representatives in the field looking at prices in anticipation of a buying tender. So far, both countries are quiet. India and other major buyers traditionally can wait until February or March before looking around for some deals. The buys that excite traders and producers this time of year are usually from granular markets, and Yuzhnyy is big on prills.
Reports circulated early last week that a $275/mt FOB deal was done. That deal was followed by rumors that $277/mt FOB was most likely concluded as well.
After the Turks, the round-up of the usual suspects has most people pointing to either Fedcominvest or Agora as the reason the price is moving up. Fedcom is said to have picked up a couple of cargoes last month to fulfill its last commitment to STC/India. Agora now seems to be looking around for tons to fulfill its 100,000 mt commitment to IPL/India.
At $275/mt FOB, sources say Agora will take a pounding in its IPL deal, which was at $300/mt CFR.
Bids at $275/mt FOB are countered quickly closer to $280/mt FOB. One trader noted that at least the door isn’t being slammed in the face of anyone bidding at that level.
Middle East: Prices show an interesting range. Egypt closed a tender earlier this month at $333/mt FOB for granular. Last week Iran closed a deal at Euro204.50/mt FOB, for a U.S. dollar equivalent of $289/mt FOB. Sources say there is usually a discount for Iranian tons because of ongoing logistic problems at the loading port, and because of the extra steaming time from the upper Arab Gulf. That discount can be as little as $5 or as much as $10.
Sources are comfortable calling the granular market $310-$335/mt FOB.
The limited tonnage of prilled urea in the area remains under long-term deals that date back to tenders awarded during the last quarter of 2009. Until a buyer publicly accepts a new price from area producers, the price index remains in the upper $200s/mt FOB.
China: The market continues to move up. Prills should hit $300/mt FOB by the end of the month. Granular will also remain strong. Buyers looking for cheaper product are disappointed.
Sources report the supply line to bonded warehouses is full. More tons keep heading to the portside warehouses. Just how many tons are actually destined for end users is up in the air.
As the price edges up, sources say the chances for finding a home for the tons diminishes. Traditional buyers in the Philippines and Vietnam are digging in their heels about what they are willing to pay. And what they are bidding is lower than the current market.
Industry observers are unanimous in their understanding that any tons in a bonded warehouse and booked to be loaded on a specific vessel can be loaded at the current 7 percent export duty after Jan. 31.
Beginning Feb. 1, the duty will jump to 100 percent for a month.
Tons not sold to an end user but in a bonded warehouse could be held over until the export duty drops again in March, say sources. By then, said one trader, the international market may have moved up enough to cover the costs of production and additional storage.
Vietnam: Sources report there is still some strong demand for material, but not at the current price levels. Vietnam is looking at $330-$340/mt CFR. With Chinese prills looking to close out the month at $300/mt FOB, sources say it is unlikely a deal can be made in time to placate the Vietnamese buyers.
Alternative sources such as the Black Sea or the Arab Gulf are also out for Vietnamese buyers for the same reason.
Area traders say Vietnam may have enough tons in storage to hold it over for a while. Those tons, plus domestic production, should keep the southern end users satisfied until March. By then, however, more tons will have to be bought.
A few floaters of prills were purchased in December and early January. Those tons are quickly being digested by local demand. Now, buyers are reportedly waiting for the Chinese to soften their prices.
Area observers are not expecting to see much movement in prices from the Chinese.
Some of the pressure to buy in the north could be eased once the Chinese export duty goes up. Sources report the border between Vietnam and China is so porous that urea “not seen by customs officials” usually has a good chance getting through.
Thailand: Thai buyers are now getting nervous. The buyers had expected prices to soften as the year ended. Instead, the price started to edge upward. They took several tons as 2009 closed with the hope that the first quarter of this year would see a softening. Once again, they erred.
Sources report that the usual buying rounds in February and March may be moved up a few weeks because domestic reserves are lower than expected.
Oceania: Buyers from New Zealand and Australia keep looking for tons. Sources say these two buyers are helping keep the Middle East producers happy with orders.
NITROGEN SOLUTIONS
U.S. Gulf: UAN barges were reported to be moving up last week, with new sales in the $186-$189/st FOB range ($5.81-$5.91/unit).
Eastern Cornbelt: UAN continued to be quoted in $7.21-$7.75/unit range FOB regional terminals to the dealer, depending on location.
Western Cornbelt: UAN-32 was steady at $225-$240/st ($7.03-$7.50/unit) FOB regional terminals, depending on location. One wholesale source said he had booked a fair amount of UAN for spring based on dealer commitments.
California: The UAN-32 market was unchanged at $235-$245/st ($7.34-$7.66/unit) DEL in California, with the warehouse range quoted at $233-$245/st ($7.28-$7.66/unit) FOB to the dealer.
Pacific Northwest: Delivered UAN-32 was up $10/st, to $240-$250/st ($7.50-$7.81/unit) in the region, with some sources quoting the current dealer price solidly at the upper end of that range following Jan. 18 posting hikes from some regional suppliers.
Western Canada: The UAN-28 market was up some $12/mt from last report, with pricing to the dealer reported at $294-$310/mt ($10.50-$11.07/unit) DEL in the region. Dealer reference levels were quoted as high as $320/mt ($11.43/unit) DEL in the region, depending on location.
AMMONIUM NITRATE
U.S. Gulf: Barges continued to be called $215-$220/st FOB.
Western Cornbelt: Ammonium nitrate was quoted at $275-$295/st FOB in the region, also up slightly from last report. The upper end of the range was reported in Iowa to the dealer.
California: No market was reported for ammonium nitrate in California. CAN-17 remained at $255-$275/st FOB in the state.
Pacific Northwest: No current prices were reported for ammonium nitrate in the region. CAN-17 was unchanged at $245-$250/st FOB and $260/st DEL.
AMMONIUM SULFATE
Eastern Cornbelt: Ammonium sulfate was pegged at $200-$215/st FOB in the region last week.
Western Cornbelt: Granular ammonium sulfate was pegged at $200-$220/st FOB in the region, reflecting another slight increase from last report.
California: Ammonium sulfate was steady at $210-$247/st FOB, depending on grade and location, with the lower numbers quoted for standard grade. One supplier reposted regular grade ammonium sulfate on Jan. 18 at $235/st FOB Chico for the northern California market, with fluid grade postings moving on that date to $220/st FOB Sacramento and $225/st FOB Chico for truck tons to the northern California market.
Pacific Northwest: Granular ammonium sulfate was tagged at $220-$240/st DEL in the region, reflecting a $20/st increase from last report. Agrium’s granular ammonium sulfate postings firmed on Jan. 13 to $245/st DEL in Washington, Oregon, Idaho, Montana, Wyoming, Utah, and Nevada, and $240/st FOB warehouses in Washington, Oregon, Idaho, Utah, and Nevada.
Another regional supplier moved its ammonium sulfate postings up on Jan. 18 to $225/st FOB and $230/st DEL for granular and regular grade product in Washington, Oregon, Idaho, and Montana, and $165/st FOB and $170/st DEL for fluid grade ammonium sulfate in those states.
Western Canada: Granular ammonium sulfate was tagged at $305-$315/mt DEL to the dealer, up $15-$20/mt from last report.
PHOSPHATES
Central Florida: With inventories running very low, traders in Central Florida said last week that phosphate was extremely difficult to find and MAP was nearly an impossible commodity.
Last week both Mosaic and CF hiked their price for DAP to $390/st FOB, but had not made any sales at that number. A week earlier, a trader was able to hit the $390/st FOB price, but ran dry this week.
The hard freeze in Florida that devastated citrus and vegetable crops the previous two weeks passed, and damage assessments were underway. Florida Gov. Charlie Crist asked the federal government to declare agricultural areas of the state a disaster area, which would pave the way for financial relief. Meanwhile, homeowners and governments were struggling to repair damage caused by sinkholes that opened after heavy pumping to protect crops dropped the Floridan Aquifer 60 feet.
PotashCorp completed its turnaround at its Aurora processing plant in North Carolina on Jan. 18 and was returning to normal production levels.
The Central Florida range last week was unchanged at $380-$390/st FOB.
PCS Sales was charging “market prices,” and does not have a Central Florida reference price. Agrifos was selling truckloads at $420/st FOB for DAP and $430/st FOB for MAP; its railcar price was about $5/st FOB less than for trucks.
U.S. Gulf: NOLA DAP Barges for prompt delivery on the Gulf’s river system were harder to find last week, and prices continued to creep upward. Reflecting that trend, sources said a couple of companies that made sales to China earlier had bought back the cargo to sell on the domestic market. Most other domestic suppliers were holding off making export sales in order to take advantage of the more robust markets on the river system and Central Florida
As the price of phosphate barges rose, warehouse prices were following suit. On the Arkansas River, prices rose about $5/st FOB last week. For many, buys from warehouses were taking a priority over NOLA DAP barge deals due to availability.
With reports that grain inventories were higher than anticipated, the price for current corn slipped to about $3.68/bushel. Crop prices for the next season were still in excess of $4.00/bushel, even though an estimated 90-million acres were expected to be planted in the spring. The future price will be what pushes farmers to buy more fertilizer, rather than for the crop already harvested.
Early last week, NOLA DAP barges could be purchased for as low as $398/st FOB, but by mid-week the price had risen to $405/st FOB. Sales for March were running as high as $410/st FOB.
Although DAP could be found for prompt delivery, or at least relatively prompt delivery, that was not the case with MAP, which has been harder to find than cheap fuel.
The NOLA DAP barge price last week increased from $392-$400/st FOB in the previous range to $398-$405/st FOB, and prices for MAP were running $10-$20/st FOB higher. MAP continued to be extremely scarce and that does not look likely to change. Based on forward sale prices, buyers should expect to pay more this week than last. Some were speculating that the price of NOLA DAP barges could rise to as high as $450/st FOB in the near future.
Eastern Cornbelt: DAP remained in the $435-$445/st FOB range out of most regional warehouses, with the low end out of port river locations in Illinois. MAP was quoted at a $10/st premium to DAP. One Indiana dealer quoted MAP at $455/st FOB and $457/st DEL in his location, depending on supplier.
10-34-0 market remained at $350-$365/st FOB in the region. One source reported booking prepay tons earlier at the $337/st FOB level, but that offer was no longer on the table last week.
Western Cornbelt: The DAP market remained at $425-$445/st FOB regional warehouses, with the low out of river terminals in Missouri on a spot basis. MAP was $15/st higher than DAP, and remained in tight supply. 10-34-0 was steady at $345-$355/st FOB in the region.
California: Sources reported firming phosphate prices. DAP and MAP were quoted at $460-$470/st FOB or DEL. Simplot was referenced at $465/st before discounts. Agrium’s MAP postings firmed again on Jan. 15 to $480/st FOB or railDEL in California and Arizona. Those levels reflect a $15/st increase from Agrium’s Jan. 7 postings, a $35/st increase from Dec. 23 postings, a $70/st increase from Dec. 9 postings, and an $85/st increase from Nov. 30 list prices.
16-20-0 had firmed as well, to $317/st rail-DEL and $317-$347/st FOB warehouses, depending on location. Simplot was referencing 0-45-0 TSP at $435/st rail-DEL or FOB French Camp, up $10/st from last report. Simplot was referencing 0-45-0 with Avail at an $83/st premium to TSP.
Super phosphoric acid (SPA) and merchant grade acid (MGA) remained at $7.50/unit DEL in California, with Simplot referenced at $7.70/unit FOB the warehouse for MGA. A $.35/unit increase is slated for Feb. 1.
The 10-34-0 market in California remained at $333-$354/st FOB, with the low in the Central Valley and the upper end at desert locations. Sources said the market will firm $15/st in February following the increase in phos acid pricing.
Pacific Northwest: DAP and MAP pricing had firmed to $455-$465/st DEL in the region. Agrium’s MAP postings moved up again on Jan. 15, to $465/st DEL in Montana and Wyoming; $470/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $475/st DEL and $470/st FOB the warehouse in Washington, northern Idaho, and Oregon excluding Malheur County. Those levels reflect a $15/st increase from Agrium’s Jan. 7 postings, a $35/st increase from Dec. 23 postings, a $70/st increase from Dec. 9 postings, and an $85/st increase from Nov. 30 list prices.
Simplot’s dealer reference price for 0-45-0 TSP was $430/st FOB Pocatello, while 0-45-0 with Avail was priced at an $83/st premium to TSP.
Phosphoric acid remained at $7.50/unit DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA), but a 35 cents/unit increase is scheduled for Feb. 1.
16-20-0 was pegged at $312-$319/st DEL in the region, reflecting an increase from last report. 10-34-0 remained at $350-$360/st FOB in the region last week, but sources said a $15/st increase is slated for Feb.1 when the new phos acid prices take effect.
Western Canada: The MAP market was tagged in a broad range at $562-$597/mt DEL in the region, up $40-$50/mt from late-December pricing levels. The lower numbers were reported in Manitoba, with the higher end of the range reflecting dealer prices in parts of Alberta. Dealer reference levels were quoted as high as $605/mt DEL level last week.
10-34-0 pricing was also up in the region, to $470-$473/mt DEL in Alberta and Saskatchewan, up some $20/mt from last report.
U.S. Export: Interest from offshore buyers in obtaining phosphate was far stronger last week than anyone in this country willing to sell. The primary reason was a stronger domestic market. Two suppliers who had made deals to sell to China were said to have bought back their deals in order to sell on the U.S. markets. Several had received offers to buy, but were unwilling to sell.
A sale of 25,000 mt was said to have been made from Turkey to a buyer in Australia at $450/mt FOB. The Fertilizer Institute issued its export report for December, which showed offshore sales of both DAP and MAP were up substantially last month and last year.
In December, China received 145,374 mt of DAP from the U.S., while Peru was the second biggest buyer at 30,300 mt, followed by Kenya at 25,625 mt. For the month, exported DAP was 343,156 mt, an increase of 111.4 percent over the previous December. For the calendar-year-to-date, India took 3,453,580 mt, with China a distant second at 426,129 mt, and Brazil third at 163,739 mt. The total amount of DAP exported in 2009 was 5,734,156 mt, an increase of 26.7 percent over 2008.
TFI said Canada was the top importer of MAP at 73,435 mt in December, followed in order by Colombia at 12,344 mt and Brazil at 7,338 mt, which represented an increase of 381.9 percent over the same month in 2008. For the calendar year-to-date, Brazil was the largest buyer of U. S. MAP at 502,223 mt, with Canada second at 426,964mt and Australia third at 426,964 mt. The total amount of MAP exported in 2009 amounted to 1,563,947 mt, an increase of 6.9 percent over the previous year.
The export DAP range was unchanged last week at $415-$435/mt FOB. PhosChem hiked its asking price to $450/mt.
Asia: The unexpected jump in prices has most buyers redefining the term “deal.” What seemed too expensive a week ago now looks like a bargain. Sources report buyers are stunned at rumors that the U.S. export price could hit $450/mt FOB in the next week or so.
One trader said buyers and sellers “are definitely in ‘bubble’ territory now.”
India: OCP has agreed for 100,000 mt P2O5 at US$610/mt CFR including 30 days for January, 2010 shipments only, while GCT has priced 80,000 mt P2O5 for delivery during first quarter 2010 at US$627.50pmt CFR including 30 days. Sources expect other major suppliers to agree to these prices.
POTASH
Eastern Cornbelt: Potash was steady at $390-$397/st FOB and $400/st DEL in the region, based on January pricing levels from producers. One source said he booked some granular potash for as low as $397/st rail-DEL in early January. Several sources said potash producers were accepting orders at the early January posted pricing levels yet through Jan. 23, but new sales after that would reflect the $30/st increase for March delivery.
Western Cornbelt: Sources described fertilizer activity as generally quiet, although there was a flurry of potash buying activity at mid-month. Potash prices last week remained at $390-$397/st FOB, depending on grade, with the upper end for white granular tons on a spot basis. One southern Missouri source quoted red granular potash in the $390-$395/st FOB range in his location. “We have seen some people step up on potash,” he said. “We’ve put a lot of potash on the books this week.”
California: Potash had reportedly dropped to $420-$430/st DEL in California, depending on grade. Potassium nitrate was quoted at $979-$1,049/st FOB. The sulfate of potash (SOP) market had reportedly dropped to $590-$600/st FOB for bulk tons, depending on grade and supplier, with the low end of the range quoted for standard grade.
Pacific Northwest: Potash was pegged at $405-$415/st FOB and $415-$425/st DEL in the region, down significantly from December pricing levels. Effective Jan. 5, Agrium’s 60 percent red premium potash postings moved to $415/st rail-DEL and $405/st FOB the warehouse in southern Idaho, Utah, and Oregon’s Malheur County; $420/st rail-DEL and $410/st FOB in Washington, the Idaho Panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $425/st rail-DEL and $415/st FOB in Oregon’s Willamette Valley. A $30/st increase is scheduled for all price points March 1.
Intrepid’s potash postings at Moab and Wendover, Utah, moved in early January to $360/st FOB for 60 percent white granular and $355/st FOB for 60 percent white standard.
Western Canada: Potash to Canadian customers FOB Saskatchewan mines was quoted as low as $407/mt FOB last week, following downward pricing adjustments from producers in early January. PCS Sales moved its 60 percent potash postings in Eastern Canada down on Jan. 4 to $450/mt FOB warehouse locations on Ontario and Quebec.
China: There were reports last week that Israel’s ICL tried, but could not do better than $350/mt CFR to China. ICL had not responded to inquiries at press time. Reports were the company would sign on for 400,000 mt to China.
SULFUR
Tampa: Shortly before going to press, Mosaic settled with all of its sulfur suppliers at $90/lt for molten delivered to Tampa by vessels. When Mosaic began settling prices for the first quarter for molten sulfur delivered to Tampa at $70/lt, it appeared the end was near. However, that turned out not to be the case, as some of the major suppliers began to balk at the $40/lt increase from the previous quarter. Apparently, the price the remainder were seeking was about $100/lt. The increase of $60/lt was close to what they had sought.
By late last week, PotashCorp was beginning to settle at $90/lt with its suppliers, and Mosaic was still working to seal a deal with its suppliers. That could change soon.
Two factors were hovering over the negotiations – world prices, which were considerably higher than the Tampa price, and the far tighter than anticipated supply.
Prices on the phosphate market began to escalate rapidly during the previous quarter, and that trend was continuing into this year. While demand for phosphate has increased sharply, producers have not been able to kick up production to a level to meet the new increased demand due to a lack of raw materials.
Meanwhile, refineries have been hard hit by the weak economy. The price of crude oil has been around $80/barrel, and most of what refineries had available has been sweet crude. With fewer people working and therefore driving less than normal, less gasoline was being refined. When problems develop at refineries, companies have had no need to bring them back online quickly; so much less sulfur was being produced. In addition, the world market was paying so much better than sending molten sulfur to Tampa that more has been going to prill operations on the gulf coast. The result is reduced availability.
Naturally, neither buyers nor sellers were willing to discuss whether the sticking point was price or a guarantee of deliveries. Green Markets will not post a change to its price index until both Mosaic and PotashCorp have reached agreements with all of their major suppliers.
MARKET NOTES
India: The Indian government may begin rolling out its new subsidy plan early, according to area media. The Nutrient Based Subsidy policy will change the way subsidies are paid for fertilizer inputs.
The old method paid subsidies to the producers so they would charge farmers at a set level for urea no matter the source. Imported urea was routed through the producers for this system.
The new method will give subsidies directly to the farmers based on the nutrient levels of their fertilizer.
Sources said the move should encourage more farmers to use look closely at which fertilizer they use.
The new policy, said one report, is designed to stem the overuse of urea in favor of a more balanced application policy. The new plan could be rolled out as early as next month. Initially, industry watchers had expected the plan to take effect at the beginning of the fiscal year, April 1.