Research Triangle Park, N.C.-Imidacloprid, the insecticide that is applied with fertilizer, has been carefully researched and is not the cause of colony collapse disorder (CCD), which is mysteriously eliminating bee populations across the country, according to producer Bayer Crop Science. At this point, Bayer points out, government and academic researchers agree the cause of CCD is not yet known. But the founding editor and publisher of People, Places and Plants magazine has a different idea. Recently journalist and landscaper Paul Tukey, who started the magazine in 1995, reported that he suspects imidacloprid, which is commonly found in lawn treatments aimed at eradicating grubs, aphids, whiteflies, and other pests and has become more widely used during the last three years ?Çô the same timeframe in which CCD appeared. Tukey’s theory is that imidacloprid, which is commonly called Merit, doesn’t kill bees directly, but it disorients them so they can’t find their way back to the hive and therefore die. Bayer responded, “Unlike various factors being investigated as potential causes of CCD, Bayer CropScience and independent researchers have conducted extensive laboratory and field trials on imidacloprid over the past 10 years and have confirmed it can be used without impacting honey bee populations. In fact, this product is one of the most widely researched insecticides in terms of bee safety assessment. Since its introduction in 1994, it has been used extensively and without incident of harm to bees such as that seen in CCD.” Bayer added that the direction of scientific investigation is turning increasingly toward a combination of parasitic mites and honey bee pathogens, noting that many researchers have investigated the exposure of bees to pesticides and found no correlation with CCD. “A robust agricultural system depends on both pollinators and crop protection products to help feed a growing population. Bayer CropScience understands the importance of thoroughly researching the causes of bee health problems and supports efforts to find causes and remedies. Claims that pesticides in general, or imidacloprid in particular, are the cause of CCD have no scientific basis and distract from finding the real reason for this serious bee malady,” said Bayer.
All posts by traceybg@gmail.com
Management Briefs
Yara International ASA CEO Thorleif Enger is retiring. He will be replaced by Jørgen Ole Haslestad, 57, in September 2008. Mr. Enger steps down at his desired retirement age of 65 years.
Haslestad comes to Yara from Siemens, where he recently was named one of a new group of 15 CEOs to oversee the conglomerate’s operation. Haslestad is CEO of the Industry Solutions Division, with a turnover of approximately US$12 billion. During his 14 years at Siemens he held several senior executive positions across Asia, the Americas, and Europe. Prior to joining Siemens, he was CEO of Kongsberg Offshore. A board member of both Yara and Tandberg since 2004, he holds an M.S. degree in Mechanical Engineering.
“Having spent 14 years abroad, I am delighted to come home and run one of Norway’s most exciting and expansive international companies. I have followed the company close up as a member of the board for four years. Coming from a farming family and being a farmer still, I have deep respect for our natural heritage and a strong commitment to creating sustainable solutions,” says Haslestad.
“The search for a new CEO at Yara has been very thorough over the last year,” said Chairman of the Yara Board Øivind Lund. “Thorleif Enger has been clear on his intention to step down at age 65, and we have considered several internal and external candidates to replace Mr. Enger. We are extremely pleased with the choice of Jørgen Ole Haslestad. He has both the international experience, a successful track record running global multi-billion dollar businesses and a strong knowledge of Yara as a long-term board member. He brings both inside knowledge and outside experience when he joins the company on a full-time basis in September.”
Enger took on the role of leading the Hydro Agri division in 1999. He led a very successful turnaround process and was instrumental in preparing and executing the IPO in 2004. Previously, he held several executive positions at Norsk Hydro and in international business. Enger will continue in his role as President of IFA – The International Fertilizer Association.
“Thorleif Enger has built a very successful operation in Yara, increasing shareholder value tenfold since the IPO in 2004,” added Lund. “We thank him for his strong efforts, the remarkable journey that the company has had and the strong platform that he has built. We remain confident that Yara’s success will continue.”
Yara CFO and Head of Strategy Sven Ombudstvedt has decided to step down from his position and will leave Yara July 4, 2008. A new CFO will be appointed during week soon. He has served in the positions since October 2006. He was formerly senior vice president upstream from 2003 until 2006; prior to this, he held a number of leading positions in Norsk Hydro.
Catherine Randazzo recently joined The Sulphur Institute as president and CEO. She joins TSI after over 20 years of successful performance in senior management roles with The Society of the Plastics Industry Inc., most recently as chief operating officer and executive vice president.
Ken Boltz, vice president of Jupiter Sulphur LLC, was elected chairman of TSI’s board, succeeding outgoing chairman Kenneth Ellzey. Egbert Veldman, business vice president of Shell Sulphur Solutions, was elected vice chairman.
Recent new members to TSI include Agip KCO (Kazakhstan), Interacid Trading SA (Switzerland), OCP Group (Morocco), solvadis GmbH (Germany), Transammonia Inc. (USA), Marsulex Inc. (Canada), and Chemical Initiatives (South Africa). TSI has some 35 members around the world.
Rentech Inc. has announced organizational changes. Merrick Kerr, executive vice president and chief financial officer, will be resigning effective July 18 to pursue other opportunities. His responsibilities will be assumed on an interim basis by Douglas Miller, executive vice president and chief operating officer, until completion of a search for a new CFO.
“With Doug Miller’s appointment as Interim CFO and the continuing support of our chief accounting officer, Deb Harshman, we are confident that there will be no disruption to the company’s business or financial reporting and related functions,” said D. Hunt Ramsbottom, Rentech president and CEO. “Doug has had significant financial experience during his 27 years in the energy industry, including 15 years at Unocal.”
As part of the new organizational structure, John Diesch, senior vice president of operations, will have his duties expanded to include primary responsibility for overseeing the day-to-day management of the company’s operating assets, including Rentech Energy Midwest Corp. He previously served in various managerial roles at REMC’s ammonia fertilizer plant for ten years, most recently serving as the facility’s president. Diesch will continue to report to Miller.
The company’s technology research and development division and applications engineering division will report to Richard Penning, executive vice president of commercial affairs for Rentech. Penning has nearly 30 years of technology experience, gained at his previous employment at UOP LLC, a Honeywell company. Moving these divisions from the operations department of the company to combine with the commercial affairs function will enable Rentech to continue its focus on commercializing its technology and meeting the technology needs of its commercial synthetic fuels projects and potential customers, licensees, and partners. The organizational change will be effective upon first production at the Product Demonstration Unit, and the new group will be called Technology Commercialization.
Rentech says it has experienced expected challenges at the PDU while in the commissioning and start-up phase of the facility. The challenges are being resolved and the company believes they will not cause significant delay in the production of fuels from the PDU. Synthesis gas (syngas) has been successfully produced from the steam methane reformer at the plant; however, an issue was identified in the syngas clean-up portion of the PDU that is currently being repaired. Once resolved, syngas will be available for start-up of the Rentech reactor for the production of hydrocarbons. Meanwhile, commissioning, start-up, and testing of the remaining principal technologies at the PDU continues.
Mr. Ridha Ben Mosbah has been appointed chairman and general director of Compagnie des Phosphates de Gafsa (CPG) and Groupe Chimique Tunisien (GCT). He began his career in banking before joining CPG, where he acquired expertise within the Tunisian phosphate sector and participated in its restructuring and development. Prior to his nomination to the head of CPG/GCT, he was a member of the Tunisian government since 2004, successively as secretary of state, ministry of higher education, scientific research and technology. He graduated from Ecole des Mines de Paris.
BASF Turf & Ornamentals, Research Triangle Park, N.C., has appointed Ms. Thavy Un as marketing manager. Un will focus on developing marketing strategies for Turf & Ornamentals, as well as planning and program development. Her responsibilities will also include overseeing financial operations, forecasting, and production in collaboration with manufacturing, regulatory, formulation, and product labeling groups.
Prior to joining the Turf & Ornamentals team, Un held several positions within BASF’s agricultural division, including global marketing manager for fungicides and plant growth regulators and global marketing research analyst in Limburgerhof, Germany. Un also spent time working in marketing at Performance Chemicals in Mount Olive, N.J. and as a caprolactum project manager in Freeport, Texas. She is a Texas A&M University graduate with a bachelor’s degree in chemical engineering.
Mike Moosman, director of business development at Helm Fertilizer Corp., Tampa, has left the company. Helm said there are no current plans to fill the position.
Market Watch
AMMONIA
U.S. Gulf/Tampa: No new business was reported last week to test the market, leaving Tampa $585/mt DEL for now. Sources speculated that August may see another round of increases for Tampa, citing higher prices in Russia and the Mideast, as well as the outage at Burrup in Australia.
Eastern Cornbelt: Anhydrous ammonia pricing was also moving up as dealer-to-dealer trades of extra spring prepay tonnage wound down in late June. Dealers continued to report direct application taking place for replanted corn acres. Sources quoted the cash ammonia market last week at $880-$940/st FOB, with most sources touting the upper numbers for reseller tons but very few inquires being made for prompt tons.
Reference levels for ammonia, however, were another matter. One supplier on July 2 announced another $100/st increase for tons ordered and shipped from July 2 through July 11, with reference levels moving to $1,130/st FOB Mt. Vernon, Ind., $1,135/st FOB Terra Haute, Ind., and terminals in Illinois, and $1,140/st FOB Huntington, Ind., and Frankfort, Ind.
On July 7, Agrium’s ammonia postings will firm to $1,010/st FOB Illinois terminals at E. Dubuque, Niota, Meredosia and Marseilles, and $1,025/st FOB North Bend/Finney, Ohio.
Western Cornbelt: Anhydrous ammonia pricing was moving up as sales of extra spring prepay tons tapered off. Iowa sources tagged the market at a firm $1,000/st FOB for limited quantities of fall prepay, while Missouri sources reported prompt tons at $890-$900/st DEL from southern production points. Another source reported a $925/st FOB level for prompt tons last week, but said little business was being done.
On July 2, one supplier reposted ammonia for orders placed and shipped from July 3 through July 11 at $1,120 FOB Nebraska terminals; $1,125/st FOB Iowa terminals and Glenwood, Minn., and Pine Bend, Minn.; $1,130/st FOB Palmyra, Mo.; and $1,145/st FOB Grand Forks, N.D., and Velva, N.D. Agrium’s ammonia postings in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota were scheduled to firm on July 4 to $1,181/st FOB and $1,201/st DEL, up some $62/st from the company’s July 1 ammonia postings in that region.
On July 7, Agrium’s ammonia postings will firm to $995/st FOB Hoag, Neb., and $1,000/st FOB Greenwood, Neb., Mankato, Minn., and Iowa terminals at Garner, Early and Whiting.
Southern Plains: The ammonia market was tagged at $790-$830/st FOB in the region, with the lower numbers out of regional production points and the higher end out of pipeline terminals. One source said he expects brisk demand for ammonia during the preplant wheat run later in the summer, with expectations that the wheat demand will firm the ammonia market in the region.
On July 7, Agrium’s ammonia postings will firm to $940/st FOB Borger, Texas, $960/st FOB Mocane, Okla., $965/st FOB Conway, Kan., and $970/st FOB Clay Center, Kan.
South Central: The anhydrous ammonia market was quoted at $700-$750/st FOB for cash market tons, with the low FOB Memphis, Tenn. Sources reported no firm fall prepay offers out of regional terminals last week.
Western U.S.: Agrium raised its anhydrous ammonia postings again on July 4, with reference levels firming $63/st from the company’s July 1 postings to $1,246/st rail-DEL in Oregon, Washington, Idaho, and Utah; $1,266/st truck-DEL in northern Idaho and in Oregon and Washington east of the Cascades; and $1,271/st truck-DEL in Montana and northern Wyoming.
Agrium’s aqua ammonia postings firmed again on July 4 to $317/st FOB Central Ferry and Finley, Wash., up $16/st from July 1 postings.
UREA
U.S. Gulf: Most players were putting the granular market last week between $725-$735/st FOB for prompt barges. Product was reportedly being offered at $740/st FOB by the end of the week. There was some suggestion that deals could have been done lower than that range, but most sources say the market continued to rally, with much demand from rice and wheat country.
Prills were reported to have sold as high as $690/st FOB.
Eastern Cornbelt: Granular urea was quoted in a range of $735-$760/st regional terminals to the dealer, up considerably from the previous week. One source reported a $755/st FOB Peoria, Ill., price at midweek. Agrium’s urea postings were slated to move on July 4 to $775/st rail-DEL in Wisconsin, up $35/st from the July 1 reference levels and $175/st higher than May 1 postings from the company.
Western Cornbelt: Sources said urea prices were firming quickly. Most sources put the range at $720-$750/st FOB in the region last week, with most reporting the upper number as the more common dealer level as the week advanced. A Missouri source called the market a firm $745/st FOB at midweek, but said additional increases could bring it to the $775/st FOB mark before the week is out.
Agrium’s urea postings in the Northern Plains region were slated to firm again on July 4 to $770/st FOB North Dakota terminals at Alton, Colfax, Carrington, Marion, and Scranton, with rail-delivered pricing moving on that date to $775/st in Minnesota and the Dakotas. Those postings were up $35/st from the company’s July 1 postings, and reflect a $175/st increase from Agrium’s May 1 urea postings.
Southern Plains: Urea pricing was up significantly from last report. Sources tagged the market in a broad range at $740-$760/st FOB the Tulsa market, with the lower numbers reported early in the week and the higher numbers as the week advanced.
South Central: Sources reported brisk rice topdress activity in early July, and urea demand for rice will likely continue throughout the month of July. Urea pricing was up considerably from last report. Sources tagged the market at $730-$760/st FOB regional terminals to the dealer, with some locations reportedly posted as high as $770/st FOB as the week advanced
Southeast: The urea market out of port terminals had firmed significantly, sources said, with levels moving from the prior week’s low of $650/st FOB to a range of $750-$760/st FOB last week. Some locations reportedly had no tons for sale in early July.
Western U.S.: Agrium’s July 4 granular urea postings include $770-$785/st DEL in Montana and Wyoming; $795/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $800/st DEL in Washington, Oregon, Idaho, and northern Nevada; $810/st DEL in northern and central Utah; and $815/st DEL in southern Utah. Those levels reflect a $35/st increase from the company’s July 1 reference levels.
Agrium’s urea postings in the California market also firmed $35/st on July 4 to $790/st FOB West Sacramento, $815/st truck-DEL in central California, and $820/st truck-DEL in northern California.
NITROGEN SOLUTIONS
U.S. Gulf: Prompt UAN barges were reported at $435-$445/st FOB ($13.59-$13.91/unit FOB). Product was reportedly being offered into the East Coast as high as $495-$500/mt DEL, and there was speculation as to whether the market had reached that point.
Correction: Green Markets is changing its U.S. Gulf NOLA barge price for the issue dated June 30, 2008, to reflect a price range of $420-$440 ($13.13-$13.75/unit FOB). The previously-reported range inadvertently included forward cargoes that should not have been included in a prompt range.
Eastern Cornbelt: UAN-32 remained in a broad range at $445-$465/st ($13.91-$14.53/unit) FOB regional terminals to the dealer, with forward contract pricing for August and beyond reported in the $15.50-$15.80/unit FOB range.
Western Cornbelt: UAN remained at $13.91-$14.25/unit FOB in the region, with most sources quoting the dealer market for UAN-32 firmly in the $445-$450/st ($13.91-$14.06/unit) FOB level last week.
Southern Plains: The UAN-32 market was quoted at $418-$430/st ($13.06-$13.44/unit) FOB regional terminals, with reports of very few forward offers available. One source tagged the UAN-28 market last week at $370/st ($13.21/unit) FOB most regional production points.
South Central: UAN-32 was tagged in a broad range at $435-$465/st ($13.59-$14.53/unit) FOB terminals in the region, with the upper level reflecting new dealer reference pricing FOB Vicksburg, Miss. One source quoted the common dealer price at midweek in the $450-$460/st ($14.06-$14.38/unit) FOB to the dealer.
Southeast: The UAN market was quoted at $12.97-$13.33/unit FOB regional terminals, with the upper level also reflecting the Baltimore dealer market. New vessel tons were reportedly being indicated at the $495/mt C&F level, but nothing has been traded at that level.
AMMONIUM NITRATE
U.S. Gulf: Barge prices were reported to be moving up as buyers actually looking for barges were having a hard time finding them. As a result, there were reports of trades as high as $405-$410/st FOB.
Western Cornbelt: Ammonium nitrate pricing was up from last report, with sources tagging the regional market at $420-$455/st FOB to the dealer.
Southern Plains: Ammonium nitrate was reported at $420-$425/st FOB Catoosa, Okla., up some $20-$25/st from last report.
South Central: Ammonium nitrate was pegged at $410-$415/st FOB in the region, up slightly from last report.
Southeast: Ammonium nitrate was $410-$420/st FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate continued to firm as well, with sources quoting the dealer market at $420-$435/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was quoted in a very broad range at $375-$435/st FOB, with the low reported out of some Missouri shipping points and the upper end reflecting new producer postings in the region.
Southern Plains: Ammonium sulfate pricing in the region was on the march. Previous levels in the $325-$355/st range FOB range were in effect early in the week for granular ammonium sulfate, but new postings were taking effect. On July 2, reference levels FOB Plainview, Texas, moved to $415/st for granular from the previous $355/st FOB level; $405/st FOB for coarse grade from the previous $345/st; and $380/st FOB for standard grade from the previous $320/st FOB level. Effective July 7, ammonium sulfate postings from American Plant Food Corp. were slated to firm $50/st, with granular postings FOB Freeport, Texas, moving on that date to $375/st FOB.
South Central: Granular ammonium sulfate was reported at $390-$410/st FOB in the region last week, up significantly from last report
Southeast: Ammonium sulfate was up considerably from last report. DSM Chemicals moved its reference prices up $60/st across the board on June 23, with postings FOB Augusta, Ga., firming to $420/st for granular and $370/st FOB for standard grade. The company’s delivered postings into Florida moved to $440/st for granular and $380/st rail-DEL for standard.
Honeywell on June 23 moved its granular ammonium sulfate postings up to $435/st rail-DEL or FOB warehouse, with mid-grade sulfate postings moving to $420/st FOB or rail-DEL to the dealer.
PHOSPHATES
Central Florida: Activity was picking up in the Central Florida phosphate market last week, at least in terms of forward sales. Still, producers were busy loading domestic orders received earlier and for export. An October DAP sale for a unit train was made at $1,095/st FOB and a unit train of MAP for October was done at $1,120/st FOB; however, neither of those sales affected the current price range, which was based on prompt sales only.
Mosaic’s previously announced partial restart of its South Pierce processing plant will increase production by about 500,000 st. The South Pierce plant will make only sulfuric acid, and granulation will be done at the company’s Lake Wales facility.
The Central Florida DAP price range was $1,070-$1,080/st FOB. Mosaic was reported to have sold at $1,080/st late in the week. PCS Sales’s Central Florida reference price remained at $1,050/st FOB for DAP. CF’s price was $1,050/st FOB for DAP and $1,125/st FOB for MAP, which continued to be scarce. In Texas, Agrifos increased its prices from $1,050/st FOB to $1,075/st FOB for trucks and from $1,045/st FOB to $1,070/st FOB for rail shipments.
U.S. Gulf: Apparently most of the cheap barges that had been available in the past several weeks were mostly gone by the end of last week, and prices began to rise. In addition, prices on forward sales of phosphate barges also took a sharp increase last week. Very early in the period, four DAP barges scheduled for loading during the first half of August were purchased at only $1,010/st FOB, but a number of DAP barges for delivery in September were sold at $1,090/st FOB and MAP barges for October delivery brought $1,125/st FOB.
Meanwhile, flooding along the Mississippi River was receding last week, but crops in Iowa and some other areas were underwater and their status had not been fully determined. Barge traffic in many areas came to a halt.
A trader said large dealers were seeking to prepay for phosphates, but added his company was reluctant to take those orders because of the uncertainty of its barge supply and what prices will be at the time of delivery. However, some traders were taking those deals, and Mosaic was as well. With the disappearance of lower-priced phosphate barges, prices appear to be heading upward.
The wheat crop in Oklahoma was said to be “excellent,” and those farmers will be in the market for additional phosphate and other fertilizer products for the fall season. However, pastureland will not likely see any phosphate applications anytime soon.
Warehouse prices were moving up last week to between $1,075/st FOB and $1,100/st FOB, but those were still below replacement cost, after taking transportation and throughput cost into the equation.
For phosphate producers importing rock from North Africa, the news was not good. Prices have moved up from around $300/st FOB to $450-$500/st FOB. In addition, prices for sulfur and ammonia were also expected to increase – all of which will cut into profits.
Based on new prompt sales, the price range last week moved from $1,010-$1,045/st FOB the previous week to $1,070-$1,075/st FOB. MAP barges were available at prices $25-$75/st FOB more than DAP. Mosaic’s asking price for NOLA DAP barges increased to $1,100/st FOB and $1,1125/st FOB for MAP. CF was seeking $1,070/st FOB for DAP and $1,145/st FOB for MAP for prompt deliveries.
Eastern Cornbelt: Most sources pegged the DAP market last week at $1,075-$1,107/st FOB regional warehouses, with MAP reported at $1,095-$1,145/st FOB to the dealer. Both ranges were up slightly from the previous week. No current dealer prices were reported for 10-34-0 in the region.
Western Cornbelt: DAP was generally quoted at $1,075-$1,100/st FOB regional warehouses, with MAP at $1,095-$1,145/st FOB. One Missouri source tagged the dealer market in his location at $1,085/st FOB for DAP and $1,135/st FOB for MAP, while an Iowa source quoted the market at a firm $1,100/st FOB for DAP and $1,145/st FOB for MAP.
The only current price quote for 10-34-0 last week came from an Iowa source at $1,070/st FOB for very limited spot market tons.
Southern Plains: DAP was quoted at $1,075-$1,100/st FOB the Tulsa market, with MAP tagged at $1,135-$1,140/st FOB. Both ranges were up considerably from last report. 10-34-0 was reported at $1,015-$1,020/st FOB in the region, and remained in very tight supply.
South Central: DAP was quoted at $1,075-$1,100/st FOB regional warehouses, also up from last report. The MAP market was pegged at $1,095-$1,125/st FOB to the dealer. TSP was reported in a broad range at $975-$1,030/st FOB warehouses to the dealer, with most quotes in the upper end of that range as the week advanced.
U.S. Export: India was preparing to cut a deal with Russia last week for additional supplies of both phosphate and potash. PhosChem was reported to have sold two vessels to India.
In Argentina, farmers went back on strike again last week to protest high export tariffs on food products proposed by President Cristina Fernandez, which will have a continuing impact on phosphate sales to that country and export sales out of the U.S.
The export DAP price range was unchanged at $1,160-$1,205 mt.
POTASH
Eastern Cornbelt: Potash was quoted at $800-$850/st FOB regional warehouses on the secondary market, depending on grade and location. Potash barges were reportedly north of the $800/st level FOB the U.S. Gulf. One source said fall tons were being referenced for $885/st FOB for September shipment and up to $925/st FOB for November tons.
Western Cornbelt: Potash was pegged at $795-$830/st FOB regional warehouses for brokered or reseller tons. One source said producer tons are 100 percent allocated through the third quarter.
Southern Plains: The potash market was quoted $755-$800/st FOB regional warehouses, with several sources tagging the market at a firm $780-$785/st FOB on the Arkansas River at midweek. The Carlsbad, N.M., mine price was reported at $705-$710/st FOB for allocated third quarter tons, depending on grade.
South Central: Potash was up dramatically from last report. Sources tagged the warehouse market in an incredibly broad range of $775-$875/st FOB, with the upper end reflecting reference pricing FOB Vicksburg. An Arkansas source quoted the common dealer price at the $830/st FOB level at midweek.
Southeast: Potash was pegged at $635-$650/st FOB regional warehouses based on June producer postings for allocated tons. Regional sources reported no updated numbers last week.
SULFUR
Tampa: At least one phosphate producer confirmed that early negotiations on new prices for third quarter sulfur contracts had begun but were in a very early stage. Although not confirmed, sulfur producers were believed to be seeking an increase from as low as $175/lt to more than $200/lt. Most in the industry said they did not think much progress would be made until at least the Southwestern Fertilizer Conference at San Antonio July 12-16. In what could be an indication the sharp price rises in sulfur may be slowing on the world market, prices at the UAE rose only $20/mt FOB to $820/mt FOB. The previous month, the UAE hiked its price by $80/mt FOB. Those prices were still far higher than those paid in this country.
Inventories of sulfur appeared to be slightly improved last week. The priller at Galveston was again receiving some supplies. Refineries have been using increased amounts of heavy crude oil, which produces more sulfur that the preferred light crude. In addition, a source said flooding in the northern Midwest had stopped some shipments of sulfur and that those producers were having difficulty finding a market despite offering sulfur at prices between $300/lt and $400/lt, although it was not clear what the transportation situation was for those producers.
Some industrial customers were said to be balking at high prices, but the amount consumed by them amounts to only a fraction that used by the phosphate industry.
Vancouver: A new contract with South Africa called for prices of $830/mt FOB, which was a stiff hike from the $300/mt FOB paid by that country under the previous contract.
PCT, one of the large sulfur docks at Vancouver, will be shut down for turnaround and maintenance beginning July 8 and will remain closed until the beginning of August.
China, which has restricted the amount of imported sulfur until sometime after the Summer Olympics, was still in negotiations for new a contract.
Correction: Last week, Green Markets reported Valero Energy was building a $600 million sulfur recovery unit at its Benicia refinery. However, the entire project, which involves a scrubber and not a recovery unit, will cost approximately $600 million.
MARKET NOTES
India: The government has brought two fertilizers – TSP and ammonium sulfate – under the concession (subsidy) scheme, fixing their maximum retail prices at Rs7,450 and Rs10,350 pmt, respectively. TSP, a cheaper substitute for DAP, is expected to provide an alternative supply of phosphate even as it helps save on the subsidy bill.
A new concession scheme has also been approved for DAP that would compensate domestic manufacturers on the basis of import parity price. The pricing of phosphorous (P) in DAP, which was hitherto determined on the basis of the price of input (phosphoric acid) as negotiated by the industry, will henceforth be arrived at through a “normated” price based on the delivered cost of imported/indigenous DAP.
The policy also introduces an “outlier” concept for computation of final rates of concession on phosphate and potassium fertilizers. In the event of an importer contracting at a price lower by five percent or $30 a mt vis-a-vis the industry average, such an “outlier” concern will be entitled to 65 percent of the difference between the higher industry average and the lower outlier price. The remaining 35 percent share would go to the government. The government said the change will encourage the industry to seek long-term supplies at lower prices. The overall reduction in subsidy outgo from the scheme would be Rs11.63bn. The policy also envisages maintaining buffer stocks of 350,000 mt DAP and 100,000 mt MOP.
The new scheme will come into effect retroactively from April 1, 2008, based on a revised framework.
Welcoming the government decision, the Fertilizer Association of India (FAI) said that the new scheme, by and large, meets the expectations of the industry. “Industry is equally keen that the subsidy dues are disbursed without any delay. Since the farmer is paying only 15 percent of the actual cost of fertilizer, the rest has to come from the government if the companies are to avoid working capital crunch,” said Satish Chander, director general, FAI.
The CCEA also sanctioned Rs4.29bn for a centrally sponsored scheme on a “national project on management of soil health and fertility.” The main components of the scheme will be for the strengthening of soil testing.
Bangladesh: BCIC has told the local media that it plans to spend US$147 million to modernize existing urea plants in order to produce some 500,000 mt more urea. BCIC said that it had to raise the price of urea more than 100 percent at the beginning of last month to meet the ever-growing expenditure due to marketing the agricultural input at subsidized rates. BCIC said the official rates of urea remained unchanged for the last 11 years despite the fact that the price of natural gas, electricity, tariff, salary and wages, and other expenditures had gone up sharply during the period, causing huge losses to the factories. BCIC said currently the combined production capacity of six urea factories – Chittagong Urea Fertilizer Factory Ltd. (CUFFL), Jamuna Urea Fertilizer Factory Ltd. (JUFFL), Zia Urea Fertilizer Factory Ltd. (ZFFL), Urea Fertilizer Factory Ltd. (UFFL), Natural Gas Fertilizer Factory Ltd. (NGFFL), and Polash Urea Fertilizer Factory Ltd. (PUFL) – has now virtually fallen bellow 1.4 million mt from their original capacity of over 2.2 million mt. In line with the modernization program, the annual production will increase by 500,000 mt mt of urea over next four years, of which 200,000 mt is being added in fiscal 2008-09.
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 99.75 | 103.92 | 44.54 |
| CF Industries | CF | 143.61 | 153.79 | 61.97 |
| Intrepid Potash | IPI | 58.27 | 65.50 | N/A |
| Mosaic | MOS | 130.42 | 142.73 | 39.78 |
| PotashCorp | POT | 212.55 | 219.20 | 80.94 |
| Terra Industries | TRA | 45.21 | 48.18 | 27.12 |
| Terra Nitrogen | TNH | 124.16 | 131.47 | 119.92 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 39.22 | 32.93 | 46.22 |
| Deere & Co. | DE | 70.25 | 71.50 | 60.94 |
| Scotts | SMG | 17.01 | 18.33 | 43.31 |
SPOT BARGE PRICES
Crop losses climb as Midwest flooding continues; lock closures to last until early July
Water levels on the upper Mississippi River were starting to recede last week, but not before additional levee failures caused widespread flooding of farmland and small towns along the swollen river system. Estimates of crop damage continued to grow by the day, as did the losses sustained by barge companies due to lock closures that will remain in effect at least until early July.
Estimates of the total amount of Midwest corn and soybeans lost to flooding ranged from 3.4 million to 5 million acres last week. The American Farm Bureau Federation said flood-damaged and waterlogged corn fields in Iowa could see a 16 percent drop in statewide yields, with 1.5 million to 2 million acres of corn and soybeans either destroyed or left unplanted in the state because of the flooding.
Based on figures such as these, AFBF estimated crop losses from flooding and excessive wet weather at $4 billion in Iowa, $1.3 billion in Illinois, $900 million in Missouri, $500 million in Indiana, and $500 million in Nebraska. Iowa’s agriculture secretary put crop losses in the state at a slightly lower estimate of $3 billion.
President Bush has declared more than 103 counties in Illinois, Missouri, and Iowa as disaster areas, making them eligible for federal assistance. On Tuesday, the governors of Iowa, Illinois, Indiana, and Wisconsin asked the President to allow the federal government to cover 90 percent of disaster-related costs incurred by state and local governments, instead of the usual 75 percent.
The flooding continued to influence commodity prices, as did another round of storms that brought as much as nine inches of rain to parts of northern Missouri at midweek. On Wednesday, corn futures for July delivery moved up 17.4 cents to close at $7.30 a bushel on the Chicago Board of Trade. Wheat futures for July delivery gained 31.6 cents to $9.016 a bushel, and soybeans futures rose 36.4 cents, or 2.4 percent, to $15.374 a bushel.
On Thursday, July corn reached an all-time high of $7.60/unit before settling at $7.5375, up 23.75 cents from Wednesday. Wheat for July delivery moved up 22.25 cents to settle at $9.24 a bushel on Thursday, while July soybeans rose 36.75 cents to $15.7425 a bushel on the CBOT.
Early in the week, the reports coming from the field seemed to echo the dire news from the previous week, with one levee after another claimed by the rising river. The Elm Point Levee at St. Charles, Mo., about 30 miles north of St. Louis, was overtopped and breached early Tuesday, bringing the total number of overtopped levees in the St. Louis District alone to 12. As of June 26, 13 levees had been overtopped in the Rock Island District between Muscatine, Iowa, and Quincy, Ill.
On June 25, the Corps reported that a total of 35 levees had been overtopped and/or breached in the upper Mississippi Valley in Iowa, Indiana, Illinois, and Missouri. The Corps said on that date that “active flood fights” were ongoing at two levee sites within the St. Louis District and 10 within the Rock Island District.
At midweek, attention was focused on the Pin Oak levee in eastern Missouri’s Lincoln County, an earthen levee that protects some 3,000 acres of agricultural land, as well as some of the businesses and homes of Winfield. The levee had shown ominous signs of failure early in the week, and finally breached early Friday. The Mississippi was expected to crest at Winfield late on Wednesday at more than 11 feet above flood stage.
As for the levees located south of St. Louis to Cairo, Ill., the Corps said it does not anticipate any issues at these sites, but noted that “flood fight members and geotechnical experts” were working with local levee districts and county emergency agencies to closely monitor those locations.
Locks 11 through 15 on the upper Mississippi, which were opened the previous week, remained open to barge traffic last week. The Corps on June 25 issued an updated schedule for the remaining locks. Pending any changes to the river forecast, the Corps said locks 16 through 19 would reopen by June 28, and locks 20-25 will remain closed until July 2 or later. The area from lock 16 to lock 25 covers roughly 215 miles stretching from Illinois City, Ill., to Winfield, Mo. The Corps noted, however, that “additional rainfall could change some or all of these lock reopenings.”
Locks 16-18 are located at Illinois City, New Boston, Ill, and Gladstone, Ill., respectively, while lock 19 is located at Keokuk, Iowa. Locks 20-25 are located at Canton, Mo., Quincy, Ill., Saverton, Mo., Clarksville, Mo., and Winfield, respectively. The Corps said major cleanup efforts were underway last week at Locks 16-18 as water levels dropped below the top of the lock wall. For locks to reopen, said the Corps, water levels must be below lock walls and miter gates and cleanup and needed repairs must be made by lock personnel.
“With record fuel prices and capacity constraints, this couldn’t come at a worse time for our intermodal transportation system,” said Paul Rohde, vice president of Midwest Waterways Council Inc. in St. Louis. “Barge rates set the transportation rates for the other two modes, and the loss of barge traffic impacts cost and availability for crucial commodities that keep our economy moving.”
“It’s difficult to project at this time what the total cost of this devastation will be,” Rohde said in a Corps press release, noting that losses of more than $1 million per day are projected for the towing industry due to the operational costs of barges and boats that are unable to move through the system.
“One tow of 15 barges, unable to reach its destination, requires 1,050 (semi) trucks to carry the same amount of coal,” he said. “For petrochemicals or other liquids, an astonishing 2,160 trucks would be needed to do the job that 15 barges can do, more safely, less expensive, and off our roads. Take that away, and the economic, safety, environmental and other impacts are phenomenal.”
A portion of the Ohio River between Mount Vernon, Ind., and Old Shawneetown, Ill., was also closed temporarily last week due to shoaling caused by an influx of silt and debris carried by the swollen Wabash River, which feeds the Ohio. The closure lasted just 15 hours, with the river opening again to some 24 waiting barges on Tuesday evening, albeit with several restrictions imposed to keep vessels from running aground.
ConAgra Trade Group becomes Gavilon; unit provided ConAgra boost in fiscal year
ConAgra Foods Inc. said June 23 that it completed the sale of its commodity trading and merchandising operations conducted by ConAgra Trade Group, which includes ConAgra’s lucrative fertilizer trading business. ConAgra Trade Group was sold to an investor group led by Ospraie Special Opportunities Fund, which also includes global growth investor General Atlantic LLC and a private investment fund managed by Soros Fund Management LLC. ConAgra Trade Group was sold for approximately $2.8 billion, net of transaction costs and subject to post-closing adjustments. The final proceeds are higher than originally estimated due to increases in ConAgra Trade Group’s book value, reflecting gains and additional working capital.
The sold business will now operate as The Gavilon Group LLC. Although the purchase agreement granted ConAgra Foods the right to a portion of Gavilon’s earnings during the remainder of calendar 2008, the maximum earnings threshold in the applicable profit-sharing formula was reached prior to closing, removing any future benefit to ConAgra from this provision. Greg Heckman, formerly president of ConAgra Foods’s commercial businesses, is now chief executive of Gavilon, which will remain in its current offices in Omaha. Brian Harlander will continue to lead the unit’s fertilizer trading out of Savannah.
Gavilon will conduct grain and byproducts merchandising and fertilizer distribution, as well as agriculture, energy, and other commodity trading activities, and risk management services. Ratings agencies recently gave a positive nod to Gavilon (GM June 23, p. 15).
The ConAgra Trade Group helped ConAgra end its fiscal year May 25 with a 21.7 percent increase in net income. The sale of the unit did not become effective until after the end of ConAgra’s fourth quarter. ConAgra net income was $930.6 million ($1.91 per share) on sales of $11.6 billion, up from the prior year’s $764.6 million ($1.52 per share) on sales of $10.5 billion.
Discontinued operations reported income of $411.9 million for the year, up 45.9 percent from the prior year’s $282.3 million. ConAgra Trade Group made up the bulk of discontinued operations. By comparison, income from continuing operations was up only 7.5 percent for the year.
For the fourth quarter, discontinued operations had a 10.6 percent drop in income to $115.7 million, down from the year-ago $129.4 million. ConAgra-wide net income was $201.3 million ($.41 per share) on sales of $3.1 billion, up from the year-ago $192.0 million ($.39 per share) and $2.7 billion, respectively.
ConAgra shares were off 5.5 percent to $20.92 after its earnings release and its outlook came out June 26. The outlook did not meet analysts’ expectations, with some unhappy that ConAgra opted to sell the profitable trading group. While the group has been doing well, ConAgra was concerned about the overall volatility and unpredictability of the commodity markets in the long run.
Fire engulfs Frick blending-bagging plant
Frick Services officials last week were not ready to declare a total loss to the fertilizer blending and bagging warehouse that was ravaged by fire late in the evening June 20 at the Ports of Indiana Burns Harbor. Frick Services Chief Operating Officer Dan Frick wouldn’t put a figure on the loss or disclose how much fertilizer went up in flames. He confirmed there were no injuries since the building, where seven employees work, was unoccupied at the late hour.
Co-owner Merrill Frick reported that the steel building was an older structure that completely lost its siding and roof, but it’s yet to be decided if the frame structure that was still standing could be restored. He said there was no indication of the cause of the fire.
In the meantime, Frick is looking at some of the other buildings the company operates at the port as possible temporary locations for the blending and bagging operations.
Dan Frick said the whole facility, including inventory, suffered significant damage, including empty fertilizer bags that were stored there. The local press reported that the Portage firefighters responded under three-alarm conditions and found heavy black smoke, presumably from thousands of paper bags feeding the flames, pouring from the building. Crews were on the scene until about 4 a.m. Saturday. At one point firefighters used a pay loader to knock down portions of the wall to gain access and spray water and foam into the interior. Porter County HazMat was called in as a precaution, but no contamination was found. A 200-gallon tank of diesel fuel inside the building leaked some of its contents – which ignited – but otherwise remained intact.
Port officials said the 24,000 square foot warehouse, built in 1975, is owned by the Ports of Indiana and leased to Frick Services. Frick Services started port operations in 1975 and presently operates several liquid and dry bulk fertilizer facilities, including distribution and storage. There has also been strong demand for Frick’s lawn-care fertilizers from the growing northwest Indiana and Chicago area.
Frick’s largest facility at the port is a 160,000 st dry fertilizer warehouse that was not involved in the fire. The site has liquid fertilizer capacity of 19 million gallons.
Frick Services, which is engaged in farm service agronomy retail and wholesale, is also a large supplier of road salt used extensively on northwest Indiana roadways during the winter. In 2007, Frick Services moved 154,000 st of dry fertilizer and 42,000 st of liquid fertilizer through the port. Frick’s primary products are potash, which is mainly imported from Canada, and urea and phosphates, which are transported by barge up the Mississippi and Illinois Rivers. Overall at the port, Frick Services employs 80 at its fertilizer and grain facilities in Indiana, Illinois, Wisconsin, and Michigan.
Organic Growing finds opportunities in higher fertilizer prices, new customers
Organic Growing Systems Inc., in operation now for a little over two years, is riding the wave of higher prices and increased interest in organic products to extend its markets nationwide for what is becoming a popular poultry litter-based fertilizer for turf farms, golf courses, and municipalities. While conventional fertilizer continues to skyrocket the world over, company officials say prices for their TOP 4-2-2 remain cost-effective and very stable for what they describe as a versatile slow-release formulation with additional benefits such as water-saving, non-burning, and protection against leaching and atmospheric phasing.
Organic Growing is one of two operating companies owned by Advanced Growing Systems Inc., which also has the Advanced Nurseries wholesale operation. It says growing demand has already necessitated a second production line at its plant in Monticello, Mississippi, to boost daily capacity to between 80 and 100 tons. There are immediate plans for a third line to increase that to between 250 to 300 tons.
Its biggest customer – the Harris County Flood Control District – buys 1,000 tons per year to fertilize grasses used to stabilize banks along the many miles of flood control channels in the Houston area. At the same time, reports Mark Nichols, president, new distributors have been added in the Southwest, and the first steps have been taken to extend into California. The latest to sign-on is Pro-Organics, a division of Proscapes Landscape & Design Group Inc. of Knoxville, Tenn., which extends Organic Growing’s markets into eastern Tennessee and Kentucky, where Proscapes already dominates in the landscape and hardscape market.
“Another area that Pro-Organics plans to target aggressively is the equestrian community,” said Nichols. “Jeff Least, formerly with Lesco in the Knoxville area, joined Pro-Organics as the division head and has strong connections with this prolific group throughout Tennessee and Kentucky. The importance of organically fertilizing pastures that are grazed on by high dollar show and race horses to promote the overall health of the animals is rapidly gaining market acceptance.” He also noted that Organic Growing has become a supplier to exclusive Fisher Island in the environmentally sensitive south Florida area through its distributor Florida Mulch Inc. In addition, Gulf Coast Organics Inc. has begun large-scale distribution in Birmingham, Ala., and other similar partners are being sought for the Carolinas.
“We’re trying to find more accessible markets to our factory in Monticello,” explained Nichols. He said the sales staff has now been increased to six, including one sales person assigned exclusively to work the California market.
TOP 4-2-2 is produced from the third largest poultry raising area in the country, which supplies all of the litter processed at the Monticello plant. Nichols said that only litter from broiler chickens is used to assure consistency of the intake and avoid problems with antibiotics and heavy metals. Feather meal, which is ground-up feathers high in protein, is added, along with a proprietary odor control that increases microorganism activity.
Yara contracts Uhde for Sluiskil urea upgrade
Oslo-Yara Sluiskil BV has contracted Uhde GmbH to design and build a new world-scale urea plant to replace old assets at its Sluiskil production site in the Netherlands. Yara will invest in total approximately EUR 400 million on the site, to produce 1.3 million tons per year from 2011. “This expansion takes advantage of urea upgrading margins on excess ammonia capacity in Sluiskil, in addition to improving energy efficiency, environmental performance and maintenance cost. Long-term fertilizer prices will need to reflect the higher construction cost levels to motivate new supply in a tight and growing global fertilizer market, and this investment underlines the value of our existing nitrogen capacity combined with a strong distribution business,” says Sven Ombudstvedt, CFO and Head of Strategy at Yara International. Yara Sluiskil produces ammonia, nitric acid, nitrates, urea, liquid fertilizer, and liquefied CO2 for the food industry and environmental products such as AdBlue. AdBlue is an aqueous urea solution used in emission control devices for NOX reduction on commercial vehicles. The Sluiskil plant ranks among the largest and most efficient European fertilizer facilities.