Tel Aviv-Israel Chemicals Ltd.’s ICL Performance Products has signed an agreement with the owners of Biogema S. A., a company based at Aix-en-Provence, France, to acquire the company effective Jan. 1, 2008. The business will be integrated with ICL’s existing fire safety division. Biogema is active in the production and sales of wildfire retardants. Major products are formulations, based on special phosphates. After the sale, Mr. Patrice Oegema will stay involved with the business and consult for the new management. This acquisition follows the purchase of Fire-Trol earlier this year, a Canadian producer of wildfire retardants that was integrated with the North American Fire Safety division acquired as part of Astaris in 2005. ICL says Biogema adds an important European manufacturing, logistics, and support group to ICL’s fire safety business.
U.S. Gulf/Tampa: Inland ammonia received all the action last week, leaving NOLA at the last done at $300/st and Tampa at $322/mt DEL. Sources look for these numbers to move up before the end of the year.
Eastern Cornbelt: Fertilizer pricing continued to firm – and rapidly – for several products in early November. Sources reported long lines at ammonia terminals as fall demand kicks into high gear, and brisk movement of phosphates and potash was also reported in Illinois, western Indiana, and parts of eastern Indiana.
The heavy ammonia demand prompted some to talk of a big corn crop again in 2008, but most were expecting growers to return to a more traditional corn/soybeans rotation next year, along with a sizable increase in wheat acreage.
Ammonia pricing jumped to $545/st FOB in Illinois last week on the spot market, but several suppliers had nothing for sale as the week advanced. One source said lots of spring prepay was booked recently in the $545-$550/st FOB range, but some suppliers were now referencing a firm $560/st FOB for limited offers, or had tabled spring prepay offers until the smoke clears.
The spot shortage was also resulting in some shipments from as far away as Kansas, where pricing out of production points continued to be quoted as low as $420/st FOB last week. One supplier was referencing forward contract ammonia for December at $550-$560/st FOB Eastern Cornbelt terminals last week.
Western Cornbelt: With long lines reported at ammonia terminals in early November, sources said very little spot tonnage was available on the cash market from producers. Buyers looking for open market tons were reportedly talking to resellers for some very limited inventories. One producer was reportedly claiming it had no cash tons for sale last week in the state of Iowa.
Sources pegged the spot market for ammonia at $505-$510/st FOB in Nebraska and a firm $525/st FOB in Iowa for the limited tons available, with expectations of another near-term increase. As for spring prepay, a Nebraska source talked of a $525/st FOB offer on the table last week, but no other numbers were reported. One supplier was referencing forward contract ammonia for December at $535/st FOB in Nebraska, $545/st FOB in Iowa, and $550/st FOB in Missouri.
California: Anhydrous ammonia pricing was up $10/st from last report at $445/st truck-DEL and $460/st rail-DEL in the state. Ammonia movement was described as very strong, with unseasonably dry conditions in parts of the state.
Pacific Northwest: Anhydrous ammonia remained at $485-$505/st DEL in the region, depending on location, with little new business to test the market. Forward contract ammonia for December was referenced as high as $525/st FOB Washington terminals from one regional supplier.
Western Canada: Effective Nov. 5, anhydrous ammonia pricing moved to $711-$755/mt DEL in the region, up from the previous range of $702-$737/mt DEL.
Black Sea: Asian sources say the price is just sitting there. The turnarounds are complete so supply is up, but demand from Europe and the U.S. remains strong. Sources say prices remain in the upper $250s/mt FOB, with producers saying they will only consider bids at $260/mt FOB. No one can point to any business at the $260/mt FOB level yet, but given the way the market is moving, producers will most likely get what they want in the next week or so.
Part of the confidence producers feel is related to an ever-strengthening Middle East market. Supplies in that region are tight, and demand is picking up.
European demand from Yuzhnyy is expected to stay strong. Reports of rising natural gas prices are leading industry observers to speculate that European ammonia plants will shut down. That will leave ammonia buyers with little choice but to go to the Baltic and Black Sea suppliers.
Buyers are holding off as long as they can against the higher prices, but Asian sources say it is a hopeless effort. Some in the industry already call the Yuzhnyy market at $265/mt FOB. The Asian observers are hard pressed to see any business yet done at $260/mt FOB.
Middle East: Saudi Arabia has been offering the same mid-December tons at $265/mt FOB for a couple of weeks, with no takers. It now appears their luck is about to change.
FACT/India is closing a tender Nov. 12 for two cargoes of 7,500 mt each. The only viable source for the tender is the Middle East, and the only cargo readily available is from Sabic.
The usual supplier to FACT of below-market price ammonia is Qafco, and they are out of the running in this tender, say sources. The Qafco operations are in turnaround and are not expected to be back to full operations in time to take advantage of the tender. In the past, Qafco has offered tons several dollars below other Middle East suppliers.
Other producers in the area are said to be fully booked well into the new year. Iranian supplies are not expected to be seriously offered until March or April. Buyers are anxious to see the IPCC #3 plant get online and start exporting.
Until the FACT tender results are reported, sources say the Middle East price remains in the low $250s/mt FOB.
India: FACT called a tender to close Nov. 12. The company is looking for two cargoes of 7,500 mt each, with shipment mid-December and mid-January. Area sources expect the tender will show a dramatic increase in the Middle East price.
Reportedly, the only tons readily available for mid-December loading is a cargo Sabic has been trying to sell for a while at $265/mt FOB. Asian sources say this tender will offer Sabic the opportunity it wanted to finally move the regional price up.
The FACT tender represents the first tender in a while to nail down the price of ammonia in the area. Most of the tons entering India are under long-term contracts. Buyers and sellers are notorious for keeping the actual price under wraps.
Asia: Overall, the Asian market is tight but not needy. Sources report buyers are getting all the tons they need. At the same time, however, they are not able to get any extra tons.
In Indonesia, the KPA facility should be up and running by Nov. 15. Sources say the maintenance work on the plant has been routine. No glitches or dramatic problems have been found that would delay the restarting of the plant. A week or so after KPA comes up, KPI will go down for three to four weeks. Sources report both companies have ensured their customers are fully covered during the closures.
UREA
U.S. Gulf: Granular barge prices continued to shoot up last week, with most players saying that the week started within the $385-$388/st FOB range. They soon hit $400-$405/st FOB, and by mid-day on Thursday, sources were reporting that $410-$415/st FOB had been achieved. Expectations were that they would easily zoom into the $420-$430/st FOB range by close of business on Friday.
Sources gave several factors for the giant leap; however, most said it simply came down to supply and demand. Not enough supply as more and more buyers came into the market to buy product. Other factors were the higher prices in the international market as India has been snapping up additional tons, particularly from the Mideast. Sources note that this will mean less product available to the U.S. In addition, sources noted that Europe has been buying more product, what with more acreage expected there and high gas prices that are crimping Europe’s own domestic production. Add a good South American market to this mix, as well as reports of problems at the FertiNitro plant in Venezuela, and you have a large convergence of factors all hitting at once. To add further to all this, there was a fire at the Koch Enid plant Wednesday, a day after the company had just announced a $40/st increase in price (see page 1).
Eastern Cornbelt: Granular urea pricing was up dramatically in the wake of the rapidly firming U.S. Gulf barge market, with Illinois sources quoting a $425/st FOB terminal price to the dealer. The upper end was pegged at $435/st FOB in the region, with talk of a move to $445/st FOB in the near term.
Western Cornbelt: The urea market was “nuts,” according to one source, even though interest in non-applying products was relatively low in the region. The cash market for urea firmed dramatically to $425-$430/st FOB in Iowa last week, although new sales were few. One regional supplier had reportedly reposted urea at the $435/st FOB mark at all its warehouse locations, and another was referencing forward contract urea for December at the $450/st mark FOB Inola, Okla., and Pine Bend, Minn.
Koch on Nov. 6 moved its granular urea postings up to $430/st FOB Inola and Enid, Okla., which sources said was a $40/st increase from previous levels.
California: Granular urea pricing reportedly moved, or was in the process of moving, to the $445-$455/st FOB range in the state, reflecting a sizable increase from the previous range. The low end of the range was reported to dealers FOB Stockton and Sacramento. On a delivered basis, the market was pegged as high as $475/st in desert areas of the state, with the low end at the $455/st DEL mark.
Pacific Northwest: Washington sources tagged the granular urea market at a firm $450-$455/st DEL last week, up $15/st from last report. On an FOB basis, the regional market was quoted at $425-$445/st, with the low reported last week at Portland, Ore. Delivered urea in Montana was quoted in the $425-$440/st range, with most sources touting the upper end of that range as the week advanced.
One regional supplier was referencing forward contract urea for December at $470-$475/st DEL in Montana, and $485/st DEL in the rest of the region.
Agrium’s granular urea postings firmed on Nov. 2 to $425-$440/st DEL in Montana and Wyoming, depending on location; $450/st FOB Washington warehouse locations at Glade, Kennewick, Warden, and Wilson; $455/st DEL in Idaho, Oregon, Washington, and northern Nevada; $465/st DEL in northern and central Utah; and $470/st DEL in southern Utah.
Western Canada: Granular urea pricing was on the rise in the region. Sources tagged the dealer market at $500-$525/mt DEL as of Nov. 5, up $10/mt from October pricing levels.
India: In the wake of the MMTC tender, India picked up at least 435,000 mt in pre-tender deals. Following the tender, sources say Keytrade secured a contract to sell an additional 50,000 mt. The Keytrade deal reportedly came in at $380/mt CFR. Asian sources are not clear as to the source of the tons, but the conventional wisdom is the material is coming from China.
Even with the $380/mt CFR barrier broken, sources say that is still shy of what the Middle East suppliers want. Based on the Middle East offers in the last tender, a delivered price would be closer to $395-$400/mt.
Sources say India will still need to buy more tons before the end of the year. Another tender will most likely be called by the end of this week, they speculate.
Middle East suppliers are firm in their belief that $365-$370/mt FOB is a reasonable price for end-of-year tons. They also argue their cargoes can be delivered more easily to west coast ports than material from any other source.
They know that buyers are now focusing on deliveries to the west coast. East coast ports reportedly are being overwhelmed by ships of all sizes laden with urea. Adding to the problems at the ports are reports that the transportation infrastructure to move the tons inland is also being pushed to its outermost limits.
West coast deliveries have long favored Middle East suppliers. Only recently with inexpensive Chinese tons has that been challenged.
Some of that competition may be fading. Chinese tons need to be loaded and at sea before Jan. 1 to avoid an increase in the export duty. Some Chinese ports are also facing delays as the inland transportation infrastructure is bogging down due to a lack of trucks and railcars. Lastly, the Chinese price is moving up to keep pace with the global market. Add to that increases in freight costs because of rising fuel prices, and the Chinese advantage begins to fade quickly.
Even though a new tender is expected soon, some observers are reporting that India has picked up enough tons in tender and post-tender deals that their buying cycle is now closed.
Middle East: The last of the $245/mt FOB material is gone. Sources say the tons offered to MMTC by Sabic at that level represent a cargo that was negotiated a few weeks before the MMTC tender. Producers now claim the December and January offers of $265-$270/mt FOB are the starting prices for any discussions. Any bids below that level are reportedly rejected out of hand.
Industry observers note that while everyone agrees tons in the $240s/mt are no longer available, no one can point to a firm bit of business in the $260s/mt FOB. For their own emotional and economic well-being, many in the industry continue to claim the price covers the full range of Middle East prices offered to MMTC.
Seeing a strengthening market in Europe, Egypt is now offering its granular material at $405/mt FOB. The move by Egypt is significant to many in the industry because it signals that it has given up on selling to India in favor of European and other Mediterranean buyers. Sources are quick to point out that tons sold at this level are not large cargoes. Most of the vessels that are loaded with this expensive material are smaller coastal ships.
Black Sea: Reportedly, $355/mt FOB was done. Producers are now pushing for $365/mt FOB. The steady increase in prices confirms speculation that Yuzhnyy suppliers have given up on selling anything to India. The main buyers of Yuzhnyy material have been in Latin America and Europe.
There are now reports that the Europeans are digging in their heels against higher prices. At the same time, Latin American buyers are also expressing their opposition to paying more. One observer, however, noted east coast buyers in Latin America have little choice. Black Sea and Baltic suppliers are the mainstay of these buyers.
Earlier in the season some Chinese material could have been sold competitively on the other side of the Panama Canal, but with increased freight rates and higher FOB rates in China, options for the buyers vanished.
Sources are calling the market $355-$360/mt FOB, with a likely change that $365/mt FOB will be done by the end of the week.
Indonesia: Kujang closed a selling tender late last week for two cargoes of 15,000 mt each at $317.50/mt FOB. The price indicates a slight increase in the Indonesian price. Reportedly, the deal was sealed with local traders at 5,000 mt each. International traders now have to deal with the winners to secure a cargo worthy of a significant overseas sale. Observers say this is the last of the 2007 export permits.
China: Prices have moved up as demand from India and smaller buyers push traders to snap up as many tons as possible before the year ends.
Sources report the Chinese market has now moved to $300-$305/mt FOB bagged.
Port congestion continues to be a concern of traders and ship operators.
Sources report the problem is not always difficulties getting into the ports, but rather having the necessary work crews available to load the ships. Adding to the labor shortage, sources say bureaucratic processing delays by customs officials are also causing problems for timely loadings. Lastly, for some ports the inland infrastructure does not seem to be up to the task of moving all the tons booked.
Reportedly, some of the manufacturers are having a hard time lining up enough railcars or trucks to move the tons in a timely manner to the ports.
Some ports are also overstocked with urea, indicating the labor shortage is a greater problem.
Even with the complaints of some delays, sources say vessels are getting in and getting out with cargoes. The delays so far have been minimal.
Observers expect the pressure to intensify as the year winds down.
If the urea is not loaded and gone before midnight Jan. 1, sources say the duty on those tons will jump from 15 percent to 30 percent. The central government long ago abandoned the idea of giving an amnesty to tons booked by Dec. 31 but not yet shipped. When such an amnesty was offered in the past, sources report some “creative” bookkeeping was employed to move out tons under the lower price regime. Since the beginning of this year, the government has held firm to the position that the prevailing duty on the date of loading is what will be charged.
Pakistan: Despite the political upheaval, Pakistan is going ahead with plans to import 150,000 mt of Saudi urea for the upcoming Rabi season. The first shipment of 50,000 mt is expected to arrive next week. The tons are part of a larger deal brokered between the two countries earlier this year.
Saudi Arabia is offering urea to Pakistan at discounted rates as part of an assistance program. The deal effectively took Pakistan out of the international market and sewed up secure business for Sabic.
Bangladesh: BCIC has issued four tenders for the import of a combined total of 400,000 mt of granular and prilled urea in bags. BCIC has split the granular up in two tenders – 125,000 mt and 25,000 mt lots and prills 225,000 mt and 25,000 mt. Bids are due for all tenders Dec. 3, 2007.
NITROGEN SOLUTIONS
U.S. Gulf: Prices continued to go up, with most putting the most recent sales within the $300-$310/st FOB range. Imports into the East Coast are now called around $330/mt DEL.
Eastern Cornbelt: UAN-32 remained in a broad range at $310-$325/st ($9.69-$10.16/unit) FOB regional terminals, but sources reported little business to test those numbers. On a forward contract basis for December, one supplier was referencing UAN-32 at $333-$342.60/st ($10.41-$10.71/unit) FOB regional terminals last week.
Western Cornbelt: UAN was quoted in a broad range, but sources described interest as relatively low. The low end of the range was reported by Missouri and Nebraska sources at $9.82/unit FOB on a spot basis, while list prices in Iowa were referenced as high as $10.40/unit FOB in early November. While no new sales were reported at that high number, one supplier said he would “find it difficult to go under” that level based on current replacement costs.
California: UAN-32 was pegged in a broad range at $353-$375/st ($11.03-$11.72/unit) FOB, with delivered UAN quoted at a firm $370-$375/st ($11.56-$11.72/unit). Both ranges were up considerably from last report. Agrium’s UAN-32 postings firmed on Nov. 2 to $353/st ($11.03/unit) FOB Sacramento, $370/st ($11.56/unit) truck-DEL in Central California, and $375/st ($11.72/unit) truck-DEL in Northern California.
Pacific Northwest: UAN-32 pricing was moving up, with the regional market quoted at a firm $340-$350/st ($10.63-$10.94/unit) DEL. Agrium’s UAN-32 postings moved up $10/st on Nov. 2 to $345/st ($10.78/unit) DEL in Washington, northern Idaho, and northwestern Oregon excluding Malheur County; $350/st ($10.94/unit) rail-DEL and $355/st ($11.09/unit) truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; and $375/st ($11.72/unit) truck-DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings moved on that date to $328/st ($11.71/unit) truck-DEL in Montana and northern Wyoming.
Western Canada: UAN-28 was quoted at $317-$332/mt ($11.32-$11.86/unit) DEL last week, reflecting a $6/mt increase from mid-October pricing levels in the region.
AMMONIUM NITRATE
U.S. Gulf: The last done numbers were put at $300-$305/st FOB, with first quarter quoted at $330/st FOB.
Western Cornbelt: Ammonium nitrate was quoted in a broad range at $330-$350/st FOB in the region, with the upper end reflecting new reference prices in Iowa. Although no actual sales were confirmed yet at that higher number, sources said the increase was driven by the rapid upswing in urea pricing. One source said he anticipated locking in a sizable amount of ammonium nitrate, seeing an opportunity with the strengthening urea market.
California: No market was reported for ammonium nitrate in the state. CAN-17 pricing, however, was up significantly from last report. Sources pegged the regional market in a broad range at $275-$310/st FOB, with the upper end reflecting new postings slated to take effect late in the week.
Pacific Northwest: Ammonium nitrate remained at $395-$405/st DEL in the region. CAN-17 was pegged at $242-$247/st FOB and roughly $252/st DEL in Washington, up slightly from last report.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate pricing remained at a firm $230-$240/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was quoted at $230-$235/st FOB in the region. Agrium’s ammonium sulfate postings were slated to firm on Nov. 9 to $245/st rail-DEL in Nebraska, Wisconsin, Minnesota, and the Dakotas.
California: Ammonium sulfate was reported at $230-$250/st FOB, with one supplier referencing the $240/st FOB level for standard grade sulfate last week.
Pacific Northwest: The ammonium sulfate market was quoted at $250/st DEL in the region, but another increase was on the way. Agrium’s ammonium sulfate postings will firm on Nov. 9 to $250/st FOB warehouses in Washington, Idaho, Oregon, Utah, and Nevada, and $255/st DEL in Montana, Wyoming, Idaho, Washington, Oregon, Utah, and Nevada.
Western Canada: Granular ammonium sulfate was tagged at $315-$320/mt DEL in the region in early November.
PHOSPHATE
Central Florida: Last week, PhosChem made a sale of phosphate at another new record price of $511/mt FOB, and that transaction sent shock waves through the domestic market. That would equal a Central Florida price of $457/st FOB. Producers kicked their asking prices in Central Florida up between $25/st FOB and $30/st FOB. While none of the new prices had been achieved late last week, new sales were made at considerably above the previous week’s range.
Although unit trains have sold out into April of next year, single rail cars were still available last week; however, inventories were so low it may be hard to fill them.
Several factors were pushing prices up on the domestic markets, and all were related to the export market. First, grain and other crop prices were up not just in North America, but around the world as well, as farmers everywhere were eager to increase yields. That has created a shortage of phosphates worldwide – that is, demand was exceeding supply. The second factor was the declining value of the U. S. dollar. As it declines in comparison to other currencies, exports from this country become cheaper, so demand increases. A third push was coming from South America. Brazil, which had cut way back on phosphates and other fertilizer imports the past couple of years, was back in the market in a big way, and so was Argentina. Initially, those countries were holding off buying in hopes prices would come down. They didn’t, and now South America has joined the rush to buy.
Phosphate producers want to keep the North American market somewhat close to the export market, so they have been hiking prices. In addition, demand in this country has soared, mostly because of ethanol and bio-diesel plants. One producer said some traders and dealers who did not already buy may have missed the boat and may not have their needs met for the spring season.
The big question remains, what will the farmers do when they are hit by the new huge price increases in the spring? The answer is that it all depends on grain and crop prices. Future corn prices were above $4/bushel, so farmers in the Corn Belts will probably continue buying, regardless. Prices for wheat and soy beans were also well above normal, so those farmers will also stay in the market. However, farmers in areas where yields are lower or crops are less profitable will probably have to cut back on applications in the fall, but it was unclear how that would affect the overall market.
“We are clearly at a point where high prices cure high prices,” said two sources last week.
Last week, some in the industry were predicting domestic prices could exceed $500/st FOB by early next year. Most don’t even want to take a wild guess at future pricing. How long this trend will continue was anybody’s guess, but some were wondering if the fertilizer industry’s bubble will follow the same course as the tech bubble of the 1990’s and the housing bubble of earlier this decade.
In announcing its higher Central Florida reference price for DAP, PCS Sales also hiked its super phosphoric acid price for Jan. 1 from $725/st FOB to $785/st FOB, a $60/st FOB hike. After January, the normal monthly incremental price increases of $10 per month will resume. PCS’s SPA is typically sold to contract customers.
Last week, sales for railcars out of Central Florida were made between $415/st FOB and $425/st FOB, and those were done early in the week. That established the Central Florida price range, which easily exceeded that flat range of $405/st FOB the previous week. Mosaic hiked its asking price for DAP to $440/st FOB from $410/st FOB, so its MAP price would go to $436/st FOB. PCS Sales hiked its Central Florida reference price from $410/st FOB to $440/st FOB, and CF’s asking price was said to have moved from $405/st FOB to $430/st FOB. In Texas, Agrifos increased its truck price last week to $460/st FOB from $450/st FOB and hiked its rail price from $435/st FOB to $455/st FOB, although railcars were sold out into January.
U.S. Gulf: Export sales sent a tsunami through the Gulf’s river system market last week, which struck on Tuesday and continued building as the week progressed. On Monday, when the waters were calm, a sale was made at $430/st FOB, but prices continued increasing throughout the week until they hit $455/st FOB late in the week.
“After every trade, the price goes up $5-$10/st FOB each time,” a trader said. “It’s like higher stock prices. Buy in the morning and sell in the afternoon.”
One trader said he made forward sales for January at $460/st FOB and $465/st FOB on Tuesday. At first, he was patting himself on the back but, “Now, I wish I hadn’t done it.” Several others said they were no longer making forward sales because of the rapidly soaring prices of phosphate products.
As grain and other crop prices remain strong into next year, many farmers were selling their crops now – but that has created a tax problem for them. One way to offset the big profits they are making was to pay the higher cost of phosphates and other fertilizers now. A source related a story from a wheat farmer who said he was earning a higher earnings ratio paying $500/st for phosphate than he was ten years ago, when the price was far lower. Farmers, who are business people, like the math.
The declining value of the U. S. dollar, in comparison to most other currencies, will also push up export agricultural sales, which will cost less in other countries. Ultimately, the ones who will feel the impact of the higher cost of food will be the American consumer, who was already being squeezed by high fuel costs and costlier mortgages.
Corn remained the focus, but next year corn acres were expected to drop by the more than 93 million acres planted to about 88 million acres. The reason was two fold. First, there are not enough ethanol plants to process the corn to fuel, and second, other crops, such as wheat and soy beans, will have higher prices because less was planted this year, so their value will go up. However, corn planting was expected to return to the 2007 level in 2009 as ethanol plants under construction go online. Corn provides a better profit margin than other crops, so it will be a natural choice.
The NOLA DAP barge price range increased last week from $421-$425/st FOB to $430-$455/st FOB, and sales were made throughout the new range. Mosaic’s asking price at the end of the day on Wednesday was $455/st FOB, but will undoubtedly jump up again, because that price has already been achieved. Prices overall will be higher this week.
Correction: The DAP barge price for the Green Markets dated Nov. 5 is $421-$425/st FOB as is reported on pages 4 and 8. The Central Florida price of $400/st was incorrectly listed on page 1 as the barge price.
Eastern Cornbelt: The regional phosphate market was still “digesting” several back-to-back increases from producers, according to one source, but there was no doubt that warehouse numbers had firmed considerably from the prior week. DAP at midweek was quoted at a firm $455-$460/st FOB spot river locations and going up, with inland warehouses tagged at $460-$465/st FOB for confirmed business. MAP was the same as DAP, with reports of spot outages in the region last week.
One supplier was referencing forward contract DAP for December at the $485-$490/st range FOB Peoria, Ill., firming to $495/st FOB for January/February and $505/st FOB for March/April.
TSP, where available, was roughly $15/st less than DAP and MAP. 10-34-0 remained at $385-$395/st FOB, although sources reported little activity to test that market.
Western Cornbelt: Like urea, the phosphate market last week was described by one source as “absolutely crazy,” a sentiment echoed by others as well. Phosphate movement to the field was described as brisk, if slightly delayed in some parts of the region. One Nebraska source said harvest delays and wet conditions have resulted in the fall application season starting about 10 days later than normal, but demand last week was heavy.
That fieldwork delay in some areas was resulting in an overlap of seasons, according to one source, with some dealers wrapping up their fall fieldwork and actively trying to buy for spring, while others have barely started with fall demand.
The warehouse markets for DAP and MAP were quoted at $455-$470/st FOB, up significantly from the previous week. Both the low and high ends of that range were reported by Iowa sources, while a Nebraska dealer reported a $475/st DEL price and warehouse reference levels pushing the $485/st FOB mark for new sales as the week advanced.
Forward contract DAP for December was being referenced from one supplier at $485/st FOB St.Louis, Mo., and $488/st FOB Inola.
The 10-34-0 market remained at a nominal $385-$395/st FOB in the region, with tight supply and expectations for higher numbers as acid and ammonia prices continue to firm.
California: DAP and MAP were both up $10/st from previous levels. MAP was pegged at $480-$485/st FOB or DEL, with DAP $7/st higher at $487-$492/st FOB or DEL. Agrium’s MAP posting in California and Arizona firmed on Nov. 2 to $485/st rail-DEL and FOB warehouse.
16-20-0 was pegged at $325-$332/st FOB, and 10-34-0 was reported at $324-$331/st FOB, reflecting a $5/st increase from last report.
Phosphoric acid prices were quoted at $7.25-$7.35/unit DEL for merchant grade acid (MGA) and a solid $7.35/unit DEL for super phosphoric acid (SPA). Another dime/unit increase for both products is slated for Dec. 1.
Pacific Northwest: MAP was quoted at $470-$480/st DEL in the region, up $10/st from last report. DAP was $7/st higher than DAP. Agrium’s Nov. 9 MAP postings include $470/st DEL in Montana and Wyoming; $475/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $475/st FOB and $480/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.
10-34-0 was pegged at a firm $345/st FOB last week, and 16-20-0 was $315-$320/st DEL, up slightly from last report.
Super phosphoric acid (SPA) was quoted at a firm $7.35/unit DEL in the region, with merchant grade acid (MGA) pegged at $7.25-$7.35/unit DEL. A dime/unit increase for both MGA and SPA is slated again for December.
Western Canada: MAP pricing firmed to $550-$585/mt DEL in the region, up $10/mt from mid-October dealer pricing.
U.S. Export: The export DAP market continued to be the driving force for all markets last week. PhosChem made an early sale of 25,000 mt to South America at $490/mt FOB. Its next sale of 6,000 mt into Central America was done at $500/mt FOB, and finally another sale of 25,000 mt to South America at $511/mt FOB. That last sale equated to $457/st FOB Central Florida. Some in the industry said they think PhosChem can reach a price of $600/mt FOB in the next few months, and some say sooner.
Phosphate exports from China have dropped, as exporters there prepare for a stiff increase in export tariffs in January, which will be designed to better supply its own markets. Even before that development, a worldwide phosphate shortage was already a reality – so less supply and greater demand.
In Europe, 700,000 acres of farmland that had been set aside was put back into service, and that has created a huge new demand from there. Brazil, which was coming out of a drought, was attempting to make up for the shortage created when it stopped or cut down on buying last year and somewhat in 2005. Argentina was also buying more. Crop prices were not just higher in America but around the world, and farmers want to increase yields as much as possible.
Then, of course, the Almighty dollar has lost its luster and taken a tumble against other major currencies, which makes American exports, like fertilizers and agricultural products, cheaper to offshore buyers. It also makes imports more expensive for the U. S. That’s the plus side. On the negative end, countries like China, which have been buying our bonds to finance our bloated national debt, were considering putting their money on different horses. That could be catastrophic if they take that course.
The export DAP price range last week went from $459-$467/mt FOB to $490-$511/mt FOB, one of the biggest jumps in memory. PhosChem’s new asking price was $520/mt FOB.
POTASH
Eastern Cornbelt: Potash was quoted at $335-$345/st FOB warehouses to the dealer, up significantly from last report, but most sources said spot tonnage was virtually unavailable last week. PCS Sales on Nov. 7 announced a $50/st increase on all potash grades, effective for shipments between Jan. 1 and Feb. 29. This is on top of the company’s $30/st increase effective Dec. 1.
Western Cornbelt: Potash pricing was in a sprint, along with urea and phosphates, with confirmed spot sales last week in the $335-$345/st FOB range out of regional warehouses, depending on grade and location. The upper end was reported in Iowa for red granular potash. A Nebraska source reported a spot quote for red granular tons on Thursday at the $340/st mark FOB St. Joseph, Mo., and one source said granular potash was being referenced as high as $375/st FOB St. Louis as the week advanced.
California: Potash was quoted at reference prices of $308-$314/st FOB in the state, depending on grade, but availability was another matter.
Potassium nitrate was pegged at $570/st FOB for bulk and $630/st FOB for bags, up $50/st from last report. Sulfate of potash (SOP) was quoted at $423-$433/st FOB, up $35/st from last report, with the upper end for granular product. Citing supply pressure, unprecedented global demand, and escalating transportation and production costs, Potash Import & Chemical Corp. announced that it was raising SOP prices by $35/st on all grades, effective for shipments on Nov. 19.
Pacific Northwest: Potash, if you can get it, was quoted at $298-$314/st FOB and $308-$313/st DEL in the region, depending on grade and location. Availability was the key question, however, with several sources saying inventories were sold out until spring.
Effective Nov. 1, Agrium’s postings for red premium potash firmed to $302/st FOB and $297/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $307/st FOB and $302/st rail-DEL in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $314/st FOB and $309/st rail-DEL in Oregon’s Willamette Valley.
Western Canada: No current prices were reported for potash in the region due to supply issues. Some producers had reportedly pulled their regional potash prices due to oversold and strictly allocated inventories.
Russia: A Silvinit spokesman was quoted by wire services last week as saying that the company was shipping its usual 15,000 mt of potash per day past the sinkhole near the flooded Uralkali No. 1 mine in the Perm region. In addition, the sinkhole was reportedly growing at a slower rate than originally feared. Local authorities are reported to now be hoping to complete a new rail bypass by Jan. 1, versus the previously expected Feb. 1.
The Belarussian Potash Co. announced that it is resuming its potash sales and has increased potash prices on a price per mt CFR basis as follows: for sales in spot Asian markets, from US$360.00 to $400.00 for standard MOP, with immediate effect; for sales with delivery after January 1, 2008 in the spot market in Brazil, from $345-$355 to $400.00-$410.00 for granular MOP.
BPC says the price increases are driven by strong demand for potash in its major markets versus tight supply characteristics, and also as a result of increased freight rates.
SULFUR
Tampa: With sulfur inventories on the Gulf Coast already seriously short, an explosion and fire at Valero Energy’s largest refinery at Port Arthur was expected to take another 1,000 lt of sulfur out of the market until repairs can be made. The explosion, which occurred about 7 a.m. CST Thursday, resulted in the shutdown of the sulfur removal system for ultra-low diesel fuel. The fire was brought under control that morning and no injuries or deaths were reported from the incident, but the extent of the damage had not been determined. The Houston Chronicle reported the plant was operating at about 60 percent capacity, and the cause of the explosion and fire were under investigation. How long the sulfur removal system will be out of service was unknown. The sulfur recovered from the Port Arthur refinery is used by Mosaic and CF.
Worldwide demand for sulfur continued to increase, and prices for sulfur to India were said to have reached $300/mt. Although phosphate producers and sulfur suppliers reached an agreement to hike the fourth quarter price by another $28/lt, another big bump was anticipated for the first quarter of next year. However, phosphate producers will not be seriously affected by another similar hike in price, because the price of phosphates has increased significantly more. Nevertheless, they will fight tooth and nail.
West Coast: A large sulfur spot sale was made into Mexico last week in the range of $140-$150/t FOB, but a source said the next spot sale from California will probably be about $200/t FOB to either Mexico or China. The drawback was that the high prices have pretty well killed the domestic sulfur market on the West Coast.
Valero was still in the turnaround process on the West Coast. As a result, output will be curtailed until sometime in mid December, when the company’s refinery near Stockton was expected to return to service.
Jim Peters has joined Jim Hicks & Co. as its vice president of fertilizer marketing for the Pacific Northwest district as of Nov. 5. He will be responsible for the company’s fertilizer activities in the states of Washington, Oregon, Idaho, Montana, and Wyoming. Peters is a veteran of many years of sales and management experience in the industry, most recently with Agrium Inc., and prior to that with Unocal and Chevron Chemical Co. From 1992 thru 1998, Peters managed a retail outlet for Williamette Seed Co. at Salem, Ore.
Peters is a graduate of Purdue University and is a past president of the Far West Agribusiness Association. He will operate from his home office in Salem, Ore., and can be reached at 800-777-7219. His cell phone is 503- 504-7600.
The Andersons Inc. has named Catherine Kilbane to the company’s board of directors effective Dec. 1, 2007. The appointment expands the number of board members to 11. Kilbane currently serves as senior vice president, general counsel, and secretary of American Greetings Corp.
Cary, N.C.-Developer Arysta LifeScience North America is pursuing registration in all 50 states for a new crop fumigant after recently receiving restricted approval from EPA. Mike Allen, Arysta LifeScience product manager for the iodomethane (methyl Iodide) product brand named MIDAS, anticipates the first state registration will be achieved in December in the southeast U.S. California, where MIDAS is expected to be well-received as a replacement for the controversial methyl bromide, requires its own registration process, and Arysta is working with officials there to meet all requirements. Despite health concerns voiced by 54 chemists and other scientists, EPA has granted a one-year registration of MIDAS under what the agency terms as highly restrictive provisions governing its use as a pre-plant soil fumigant to control plant pathogens, nematodes, insects, and weeds on strawberries, tomatoes, peppers, ornamentals, turf, trees, and vines. EPA insists the risk assessment process for iodomethane has been one of the most thorough analyses ever conducted on a new pesticide. Allen declared that MIDAS is “the fumigant answer many growers have been looking for because it provides broad-spectrum control of target pests and diseases and uses conventional application techniques and equipment. MIDAS has been proven to be as effective as methyl bromide at lower application rates.” He said MIDAS has been in experimental use in Florida, Georgia, Michigan, North Carolina, South Carolina, Tennessee, and Virginia since 2006, and on test acreage added by EPA in California in 2007. Half of the growers who participated are said to experience on average a 19 percent yield increase compared to methyl bromide on side-by-side trials on commercial acreage. The remaining growers saw results similar to those achieved with methyl bromide. The 54 objectors from the science community sent EPA a letter Sept. 25 citing potential human health and environmental concerns and requesting additional peer review. But EPA insists that “when used according to strict procedures, iodomethane is not only an effective pesticide, but also meets the health and safety standards for registering pesticides. By using a thorough evaluation process, the agency concluded that there are adequate safety margins and the registration does not pose unreasonable risks.”
Washington–SafeLawns.org held a rally at the nation’s capitol recently to generate more support for its “million acre challenge,” aimed at getting homeowners across the country to pledge to stop using chemical fertilizers. Part of the organization’s more than 150 members and supporters, including some who belong to the American Horticulture Society, heard their founder, author Paul Tukey, announce that four acres of the National Mall are now growing organically thanks to the cooperation of the National Parks Service. “This will provide a side-by-side comparison of what organic care can do as opposed to the traditional synthetic chemical techniques,” Tukey told Green Markets. Tukey, who wrote The Organic Lawn Care Manual and started the web site SafeLawns.org in February 2006, claims chemical fertilizers are “just as bad as chemical pesticides, leaching into the ground and water and killing off beneficial soil organisms.” In addition, Tukey claims 40 pounds of chemical fertilizer contains the same amount of fossil fuel it takes to produce three gallons of gasoline. He promises that the organic way can keep lawns green even during drought, declaring that “if you avoid synthetic chemical fertilizers and switch to compost and organic fertilizers you’ll reduce the need for watering by up to 75 percent by helping the soil to store water and the grass stay green.” Also, the need for nitrogen is overstated, he insists, “because lawns don’t need synthetic nitrogen when there are organic ways to produce it.” Kathy Mathers, TFI Vice President, took issue with SafeLawn claims. “If you look at SafeLawn’s list of sponsors, it is full of commercial ventures in the organic market,” Mathers told Green Markets. “That’s fine, but where is the science behind their claims about commercial fertilizers? We have internationally recognized product testing data on 23 major fertilizer products which shows that when managed properly, fertilizers pose no harm to human health or the environment. Lawns (or crops for that matter) can’t tell the difference between commercial or organic nutrients (in fact some commercial fertilizers are on the approved organic list) and the most important thing for all homeowners to know is that management of all nutrient sources is key to protecting the environment.”
Montgomery, Ala.-Synagro Technologies Inc. has agreed to cooperate fully – and then some – with stronger statewide regulations resulting from growing concerns over the way biosolids are being used to fertilize farmland, according to the company and the state’s top agriculture official. Ag Dept. Commissioner Ron Sparks told Green Markets after a meeting with Synagro Executive Vice President Alvin Thomas that “they’re willing to do the things they need to do” to comply with new guidelines, which Sparks termed tougher than EPA’s. “Some of the things we talked about are not required by EPA,” Sparks pointed out. He said Alabama wants odor control, nutrient management, proper application, monitoring of pH levels for at least two years, and heavy metals restrictions. The state also will be restricting applications of biosolids near dwellings, streams, and property lines. Thomas indicated that Synagro intends to go beyond the state’s requirements. He said the company will make available on its web site documents pertaining to these guidelines, and will set up a customer service line “so community issues can be addressed as quickly as possible.” He added, “We will continue to work through partnerships with farmers and communities across the state as a good corporate citizen to provide increased economic and environmental benefits to agricultural operations.” Opposition spread to the state level from Limestone County, where residents complained about strong odors and biosolids being left on the surface. Officials there also talked about filing for an injunction. More recently, the Colbert County commission voted unanimously to file for an injunction against Synagro to halt use of biosolids being brought into the area from New York. Sparks said Synagro is the only biosolids applicator the state has contacted, but added that the new rules would apply to all companies in the business. Synagro ships the treated sewer sludge from New York, treats it at a plant in Leighton, and gives it to farmers.
Richmond-The Virginia Poultry Federation has joined with the State Department of Conservation and Recreation to provide $600,000 over the next three years for farmers to transport and use poultry litter from two poultry-producing counties. Officials said farmers are being offered conservation payments of either $5 or $12 per ton to haul away and use the litter as fertilizer on their fields. Typically, farmers would pay between $25-$35 per ton. “This is a public-private partnership that makes sense all around,” said Virginia Secretary of Natural Resources Preston Bryant Jr. “Developing a sustainable market for poultry litter helps stimulate the farm economy and has tremendous water quality benefits as well. This transportation program helps nurture that market.” Agriculture Secretary Robert Bloxom agreed the program is a win-win – farmers save by using the litter as fertilizer, and the state benefits from improved water quality. Farmers can sign up for incentives for up to 500 tons. Once payments are received on that tonnage, the farmer can reapply for up to another 500 tons. Participants must have a nutrient management plan in place.
Burlington, Ont.-Bio Balance, a joint venture headed by water and wastewater specialist Simpson Environmental Corp., has major plans for building a network of plants in Canada and the U.S. for turning animal processing waste into unique organic fertilizer, according to Simpson CEO Don Cooper. Cooper said Bio Balance, which includes Notra Organics as another partner, plans to locate its first plant in Smithville, also in Ontario in the Niagara area, but has run into a snag with some local council members. The facility, proposed for the West Lincoln industrial park, needs to get a zoning change from the council, but has raised questions about causing an odor nuisance. A columnist for the local paper also voiced objections, saying “all I can visualize are huge trucks, filled with animal offal, bearing down on the stop light in Smithville. It is not a pretty sight.” Cooper responded that there will be no trucking in of animal offal or carcasses, but rather a benign dryed paste material that gives off no odors. The issue is expected to come up again later this month. Bio Balance was formed to build and operate accelerated, aerobic composting facilities for clients in the food processing industry and for municipalities. Cooper told Green Markets that Bio Balance at Smithville and other locations to be selected would be using the residue collected in the washout process, which is actually high in protein. “Small bits in the washout are put through an in-vessel or composter where an anaerobic process results in complete bio-stabilization and locks in the nutrients,” Cooper reported. “Our proprietary and patented processes extract the maximum nutrient value from the organic residue, then seals in its potency so plants benefit throughout their growth curve while the problematic waste stream is virtually eliminated.” He said the Ontario facility could produce 10,000 tons a year of a natural 9-3-3 fertilizer to be bagged and sold for use on lawns, gardens, parks, golf courses, sports fields, and farms.
Urbana, Ill.-A University of Illinois researcher, with the help of Archer Daniels Midland Co., has developed a line of naturally-derived fertilizers believed to be ideal for golf course and residential use without impacting surface and groundwater and increasing turf pH. Turf specialist Tom Fermanian has turned lysine, a bio-product from fermented corn also found in many protein foods, into a high nitrogen nutrient that will be marketed by ADM under the brand name NaturStim. “One advantage of these lysine-based products is that they dissolve quickly in water and can be mixed with other turf products that are normally applied as a spray,” said Fermanian. “Lysine in its granular form is 15 percent nitrogen and soluble in water so it is quickly available for turf use, similar to most synthetic fertilizers.” He said in tests three formulations of lysine were rated equal in quality when compared with ammonium sulfate, the current fertilizer industry standard used by most golf courses. The same results were obtained with Sustane, another natural fertilizer product, and earlier with urea. “Research shows that the NaturStim products perform as well as synthetic fertilizers, but have the added benefit of providing golf course managers with a more natural alternative to traditional fertilizers,” said Fermanian. ADM, which provided part of the research funding, intends to have NaturStim available for residential use as well as commercial applications.
Disclaimer of Warranty
All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.
