Bloomington, Ill.-Fertilizer interests are pleased that Illinois Gov. Rod Blagojevich has decided to restore nearly $500,000 to the state’s fertilizer research and education program, along with other agriculture-related funding being withheld to alleviate a budget shortfall. Blagojevich’s action upset agriculture, particularly because the research funds are provided out of the pockets of the state’s farmers. “We are pleased that the funding was released for its rightful purpose,” commented Illinois Fertilizer & Chemical Assn. Pres. Jean Payne. “Unlike a state budget appropriation, these funds are generated by the industry when fertilizer dealers remit them from the 25 cent per ton fertilizer inspection fee.” Payne noted that with release of the funds “we can now continue our on-farm nitrogen rate trials, embark on residue management and N response research in continuous corn, conduct an economic impact study on the importance of fall applied N to Illinois agriculture and create a downloadable training video on proper ammonia transfer and safety for farmers, which are just a few examples of the program approved by the Fertilizer Research and Education Council for 2008.”
U.S. Gulf/Tampa:With Tampa down to $510/mt DEL, sources also report pressure on other Gulf imports, which are reported to be at least that low. CF was reported to have bought an import cargo from Sabic at $510/mt DEL or below. In addition, Koch was reported to have bought one from Qatar at $410/mt FOB.
On the barge side, sources said the dam has finally broken. Stories were flying that deals as low as $500/st FOB had been done. Sources said this number is in line with falling import prices.
Eastern Cornbelt: The anhydrous ammonia market continued to be quoted in the $800-$820/st range FOB regional terminals for limited spot sales last week, with reports of summer fill orders being taken in the $800/st FOB range for July shipments. One supplier, however, continued to reference forward contract ammonia for the July-December shipping period for as high as $1,020-$1,030/st FOB regional terminals.
Western Cornbelt: With little new business to test the market, sources continued to quote the spot ammonia market in the $760-$800/st range FOB regional terminals for actual sales, but postings were firming. Agrium’s anhydrous ammonia postings in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota firmed on May 28 to $1,065/st FOB and $1,085/st DEL. One supplier was referencing forward contract ammonia for July-December at $1,010/st FOB in Nebraska and $1,015/st FOB Iowa terminals.
California: The anhydrous ammonia market remained at $700-$715/st DEL in the state, with aqua ammonia at $185/st FOB.
Pacific Northwest: The anhydrous ammonia market was up considerably from last report in the region. While sources acknowledged that spring prepay tons ordered earlier at the $635/st DEL level were still being shipped, most quoted the current spot market as high as $1,025-$1,080/st DEL in the region. One supplier was referencing forward contract ammonia for July-December shipments at $1,035/st FOB in Washington.
Agrium’s anhydrous ammonia postings firmed on May 28 to $1,130/st rail-DEL in Oregon, Washington, and Idaho; $1,150/st rail-DEL in Oregon and Washington east of the Cascades, and northern Idaho; and $1,155/st truck-DEL in Montana and northern Wyoming. Those levels were up $70/st from the company’s May 8 ammonia listings in the region, and $205/st higher than Agrium’s May 1 postings.
A Washington source pegged the aqua ammonia market last week firmly at the $264/st FOB level. Agrium’s aqua ammonia posting firmed on May 28 to $288/st FOB Central Ferry and Finley, Wash., up $19/st from the May 8 posting, and $52/st higher than Agrium’s May 1 aqua ammonia postings at those locations.
Western Canada: Sources said ammonia pricing in Western Canada firmed on May 28 to $1,254-$1,299/mt DEL, up from the previous range of $1,032-$1,076/mt DEL. The new levels reflect a more than $300/mt increase from April ammonia pricing levels in the region.
Black Sea: Asian sources continue to look at the Yuzhnyy price with fear. One source said the rest of the world follows the Black Sea price much faster when it goes up instead of down. He noted that even as Yuzhnyy has continued to slide in the past few weeks, the Middle East and East Asia prices have not softened at the same rate.
Now with reports circulating that a deal was done at $435/mt FOB out of Yuzhnyy, these same sources are concerned that the days of a soft market are over.
Others say the U.S. demand remains the driving force on Yuzhnyy pricing, and so far nothing tells them that demand will pick up soon.
For now, Asian sources peg the market at $420-$435/mt FOB.
Middle East: Area producers had been firm in holding the price line as Yuzhnyy softened. Now, say sources, a deal in the low $400s/mt FOB was reportedly concluded by Qafco.
Asian sources were hard pressed to name a buyer, but the best guesses are the tons are bound for Europe or the U.S.
After weeks of holding onto prices in the upper $400s/mt FOB, the latest deal knocks the props out of the high prices suppliers have been able to secure.
Asian sources say the price now sits at $410-$420/mt FOB.
East Asia: Supplies to Japanese buyers remain tight as many local plants continue their routine turnarounds. The one upside to the situation, said one source, is that none of the plants has found unexpected problems. All should return to full production in the next couple of weeks.
While the plants are down, however, industrial users have to go to the international market for their ammonia supplies. The international prices, while softening, are still much higher than the domestic price. One observer noted that because the ammonia is mostly going to industrial buyers there are fewer complaints of high prices than if the product went to farmers for direct application. He said the industrial market can more easily pass on the higher input costs.
Taiwan and South Korea are enjoying a short respite from high prices. Sources add, however, that although the current price – around $500/mt CFR – is higher than anything paid in the past, it is lower than the $530-$550/mt CFR they had to pay just a few weeks ago.
Supplies in the Asian market remain tight. Sources report that every possible ounce of ammonia that can be shipped is being loaded on a vessel. Buyers looking to exercise their options for additional tons or looking for spot cargoes are being told they have to look elsewhere.
The plants in Indonesia and Malaysia dedicated to exports are reportedly working at near 100 percent capacity just to fill existing contracts.
UREA
U.S. Gulf: Prompt granular barges took a breather last week, with most putting new business within the $650-$660/st FOB range. Sources reported that several players came into the market the prior week, which had a lot to do with the huge run-up in prices. In addition, one trader was reported to have put together enough barges for another export to Chile. Sellers, citing international demand, say the NOLA numbers could continue to stay strong.
Eastern Cornbelt: The granular urea market was pegged at $645-$655/st FOB regional terminals to the dealer, up slightly from last report.
Western Cornbelt: The granular urea market was pegged at $625-$660/st FOB in the region, with the low in Missouri and the upper end of the range in Iowa on a spot basis. Agrium’s granular urea postings firmed on May 28 to $705/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton; and $710/st railDEL in Minnesota, Wisconsin, and the Dakotas.
California: Sources quoted granular urea pricing in the state at $720-$740/st FOB as the week advanced, up considerably from last report, with the upper level reflecting the new posted price from Yara FOB Stockton, Calif., effective May 30. Agrium’s granular urea postings firmed on May 28 to $725/st FOB West Sacramento, Calif., $745/st truck-DEL in Central California, and $750/st truck-DEL in Northern California.
Pacific Northwest: The granular urea market was tagged in a broad range at $695-$730/st DEL, with the higher numbers reflecting new postings that took effect as the week advanced. Agrium’s granular urea postings firmed on May 28 to $705-$720/st DEL in Montana and Wyoming, depending on location; $730/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $735/st DEL Washington, Oregon, Idaho, and northern Nevada; $745/st DEL in northern and central Utah; and $750/st DEL in southern Utah. Those levels reflect a $35/st increase from the company’s May 8 postings, and a $110/st increase from Agrium’s May 1 urea listings in the region.
One supplier was also referencing forward contract urea for July at $720-$725/st DEL in Montana, $735/st DEL in Washington, Oregon, and Idaho, and $735-$755/st DEL in Utah.
Western Canada: Granular urea was pegged at $800-$825/mt DEL as of May 28, up $125/mt from last report.
Black Sea: Despite the euphoria producers felt as they left Vienna and the IFA conference, sources say prices have not moved much. Part of the current stagnation is blamed on the lack of news from India. Until the Indian buyers make their purchasing intentions known, said one source, everyone will be guessing on what the price should be.
Adding to the confusion on prices are reports that Brazil will also sit back and take a breather to see what happens to prices before they commit to more cargoes.
A report that $700/mt FOB was done out of a Baltic port prompted people to look for more movement in Yuzhnyy. Sources, however, said that once the freight differential and an accommodation of moving granular to prilled pricing are taken into account, the Yuzhnyy market remained in the mid-to-upper $600s/mt FOB.
The malaise that seems to have permeated the market is apparently holding prices steady for now.
Middle East: Reportedly, Egypt concluded a deal for several small cargoes totaling 30,000 mt at $710/mt FOB. Once freight advantages are calculated, sources put the Arab Gulf markets at $680-$690/mt FOB for granular. One observer noted that the prilled price should be about the same.
Producers remain comfortable with their production rates and loading schedules. Even with India still out of the market, sources say the Middle East producers have enough contracts to hold onto high prices. There is just not enough pressure right now to move the price up further.
Observers note that the Middle East reserves are low, so there is no pressure building on the producers to clear their warehouses. At the same time, the contracts in hand allow enough material to be shipped out to keep the supply situation in the producers’ favor.
Pressure to charge more is already building because of anticipation of major purchases by India and Pakistan.
The Indian business will come, say sources, once the Indian government refigures its budget to accommodate what will surely be record subsidy payments for imported urea.
Pakistan is looking to Saudi Arabia to help as it did last year. A development package from Saudi Arabia last year provided Pakistan with the funds necessary to buy urea from Sabic.
Eventually, Pakistan and India will have to come in and buy, say sources. When they do, observers say the market will take off.
For now, however, even with the new Egypt business, the market for the Middle East remains stable.
China: The damage to crop and fertilizer output from the earthquake and subsequent aftershocks is just beginning to sink in. Sichuan is responsible for about 7 percent of the country’s grain production. Those crops are now lost.
The urea plants – including several of China’s top producers – remain shut down. Some are down because of damage, others because of damage to the power and gas lines, and all – to some degree – because of damage to the roads and railways.
Without decent roads or rail transportation, the coal needed by many plants cannot be delivered. And even if a plant could operate, getting the finished product out would be a major undertaking.
The immediate result of the loss of Sichuan’s urea production capacity is higher urea prices.
The government had slapped a 135 percent export duty on urea to discourage offshore sales and push domestic prices down. The strategy began to work, but following the earthquake the price has moved up to 2,200-2,300 RMB (about US$330/mt FOB ex-factory). This indicates a price of just under $800/mt FOB port for export.
While it was the conventional wisdom that the 135 percent export duty would be lowered for the fourth quarter, sources now say the duty will remain in place for the rest of the year.
The new and higher prices arrive just as the farmers in unaffected areas in the south are beginning their applications for the corn and cotton crops.
About 100,000 mt of urea has been offered or sold since the new export duty went into place. Sources say these cargoes came from bonded warehouses. Others, however, say that not all of the tons included in this number really were in the warehouses when the new tax went into place.
One trader noted that the rules about what was and was not in the bonded warehouses vary from port to port. Some port authorities counted tons under contract but still on the rails heading for the port. Others counted only the tons that were physically in the warehouse when the duty went into effect.
India: Industry sources were waiting all week to hear from MMTC, STC, or IPL. They heard nothing. According to local Indian media reports, the government has sequestered all government agencies that have to deal with the budget, farmers, imports, industry, and fertilizers. The idea of the gathering is to figure out exactly how much fertilizer will be needed and how much the government can afford.
Besides ensuring successful crops, also driving the concern of the government ministers is the small matter of national elections.
The government party is said to be concerned that even if the overall demand for urea is covered, any small area that experiences a shortage could be used by the opposition parties to score electoral points with the farmers.
At the same time, trying to import as many tons as last year – about 6 million mt – could bankrupt the treasury.
The government ministries are already saying publicly that they might have to double from the original estimates of nearly US$9 billion.
The bottom line, say industry sources, is that India may have enough to get the application season started – as the government contends – but it will need to begin buying soon to make sure subsequent applications are covered. One source said the material in warehouses now is just barely enough to ensure adequate supplies for the farmers.
Pakistan: Prime Minister Syed Yousuf Raza Gilani issued special orders to the Ministry of Food, Agriculture and Livestock (MINFAL) to finalize arrangements for the import of urea and wheat to overcome the shortage of these commodities in the country. An official statement says the ministry has decided to import 350,000 mt of urea to meet domestic requirements. It said that 50,000 mt of urea will reach the country from Saudi Arabia by June, while arrangements for the import of another 300,000 mt have been finalized, and urea is expected to arrive in July this year.
Meanwhile, a report issued by the National Fertilizer Development Centre (NFDC) disclosed that Kharif 2008 started with an opening inventory of 71,000 mt of urea. It is estimated that urea availability would be about 2.887 million mt in Kharif season, against the projected demand of 2.740 million mt. Keeping in view the present level of domestic production, together with available inventory positions, its supply during August, 2008 will be tight and further imports around 100,000 mt of urea will be required to make the supply comfortable. Furthermore, the local market has its fingers crossed and is waiting to see whether the government will import urea through the Trading Corporation of Pakistan (TCP) or arrange its import from Sabic of Saudi Arabia under financial aid.
Sources say TCP representatives and government officials were visiting the Middle East looking for a continuation and enlargement of an agreement similar to the Saudi aid package last year. The assistance program kept TCP out of the international market and guaranteed urea at favorable prices to both sides.
Apparently, said one Asian trader, the Pakistani representatives ran this idea past the Middle East producers before the IFA conference, at the IFA conference, and again last week. This same source said it was three strikes.
Mexico: Local media are reporting the government is eliminating all import duties on nitrogen-based fertilizers. The action is being taken to ease the financial burden on farmers whose crop income has not matched the increases in fertilizer payments.
NITROGEN SOLUTIONS
U.S. Gulf: The latest barge sales were called $405-$410/st FOB. Sellers, citing higher forward demand, were seeking $420-$430/st FOB for the next round of business.
East Coast: Imports were reportedly being offered around the $435/mt DEL mark.
Eastern Cornbelt: The UAN market was quoted at $13.50-$14.00/unit FOB to dealers in the region, reflecting another increase from last report. One source said the lower end of the range was for small blocks of tons that won’t last as sidedress demand picks up. On a forward contract basis for July through December, one supplier was referencing UAN-32 as high as $15.50-$15.80/unit FOB in the region last week.
Western Cornbelt: UAN-32 pricing was quoted in a broad range at $420-$448/st ($13.13-$14.00/unit) FOB regional terminals, with the low again in Missouri and the upper end reflecting reference levels to the dealer out of some Iowa shipping points. One supplier was posting forward contract UAN-32 for July-December as high as $507.40/st ($15.86/unit) FOB Pine Bend, Minn.
California: The UAN-32 market was up from last report at $450-$470/st ($14.06-$14.69/unit) FOB California terminals, with the upper level reflecting the May 23 posting from Yara. Delivered UAN-32 was pegged at $475-$485/st ($14.84-$15.16/unit) in the state. Agrium’s UAN-32 postings firmed on May 28 to $463/st ($14.47/unit) FOB Sacramento, $485/st ($15.16/unit) truck-DEL in Central California, and $490/st ($15.31/unit) truck-DEL in Northern California.
Pacific Northwest: The UAN-32 market was reported in a broad range at $435-$475/st ($13.59-$14.84/unit) DEL in the region, with the upper end reflecting higher postings that took effect at midweek. Agrium’s UAN-32 postings firmed $45/st on May 28 to $475/st ($14.84/unit) DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $480/st ($15.00/unit) rail-DEL and $485/st ($15.16/unit) truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; and $505/st ($15.78/unit) truck-DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings firmed $39/st on May 28 to $442/st ($15.79/unit) truck-DEL in Montana and northern Wyoming.
Western Canada: The UAN-28 market was on the move, with sources tagging the regional dealer price range as of May 28 at $499-$515/mt ($17.82-$18.39/unit) DEL. Those prices compared with a range of $423-$438/mt ($15.11-$15.64/unit) DEL at last report.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate was reported at $395-$410/st FOB in the region, with reports from some sources of growers switching to nitrate instead of UAN or urea due to the price difference.
California: No pricing for ammonium nitrate was reported in the state last week. CAN-17 was steady at $310-$335/st FOB, with the upper end in desert locations of the state.
Pacific Northwest: Ammonium nitrate pricing was unchanged at $454-$469/st rail-DEL, with the low end in Montana. Agrium bumped up its ammonium nitrate solution 20-0-0 postings on May 28 to $290/st FOB Kennewick, Wash., from the prior $262/st FOB level.
CAN-17 was quoted at $300-$305/st DEL. Agrium’s CAN17 postings firmed on May 28 to $325/st FOB Kennewick, up $25/st from the May 8 listing at that location.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was quoted at $350-$370/st FOB in the region, up slightly from last report.
Western Cornbelt: Granular ammonium sulfate pricing continued to firm. The market was tagged at $350-$375/st FOB regional terminals, with the upper end reflecting new dealer postings.
American Plant Food Corp. announced another increase to its ammonium sulfate postings in Texas. Effective May 29, granular ammonium sulfate postings from the company firmed to $325/st FOB Freeport, $335/st FOB Galena Park, $345/st FOB Fort Worth, and $355/st FOB Littlefield and Mermentau, La. APF’s coarse grade postings moved on May 29 to $300/st FOB Freeport, $310/st FOB Galena Park, $320/st FOB Fort Worth, and $330/st FOB Littlefield. Standard grade ammonium sulfate postings from the company firmed to $290/st FOB Freeport and $320/st FOB Littlefield, and N-Pac Compacted postings moved up to $340/st FOB Galena Park. Those levels reflect a $30/st increase from APF’s May 2 postings.
California: Ammonium sulfate remained in a broad range at $310-$350/st FOB, with the low quoted for standard grade FOB Lathrop, Calif. Yara moved its reference price for coarse or standard grade ammonium sulfate from $330/st to $350/st FOB on May 30.
Pacific Northwest: Ammonium sulfate was reported at $337-$345/st DEL in the Pacific Northwest, up slightly from last report.
Western Canada: Granular ammonium sulfate pricing was steady at $480-$485/mt DEL in the region.
PHOSPHATE
Central Florida: After inventories increased slightly in April, producers said last week they were beginning to fall, especially at field locations – meaning warehouses, where most of the activity was taking place. New, prompt sales of phosphates slowed last week, which was normal for this time of year. However, producers were keeping busy loading orders placed earlier, and the export market still looked promising.
Mosaic made two unit-train sales of MAP for the fall season last week at $1,095/st FOB, although other sources said those sales received a $10/st FOB discount because of their size. Because those deals were considered forward sales, they will not be reflected in the price range.
Until ordering for the fall season gets underway, prices are likely to stagnate in Central Florida. Some decrease in application by farmers may reduce the amount that will be needed to refill warehouses at that time. How much was uncertain, but areas that typically use phosphates for pasture land will be the most affected. The price of phosphates was simply too high for those raising livestock, and some said cattle were being rushed to market. In the short term, that will hold the line on or reduce beef prices, but it will create a shortage in the future and force beef prices back up.
Some in the agricultural industry were complaining to their Congressional representatives and senators about high fertilizer prices and were seeking hearings similar to the ones given for high fuel prices. High profits by PotashCorp and Mosaic were given as reasons the hearings were needed. While hearings were possible, it appeared there would be little the government could do about the situation, because fertilizer prices are essentially world based, as is oil.
The Central Florida DAP price range last week was unchanged from the previous week’s range of $1,025-$1,070/st FOB, based on actual sales at that time. PCS Sales’s Central Florida reference price remained at $1,050/st FOB for DAP. Mosaic’s asking price was still $1,070/st FOB for DAP and $1,095/st FOB for MAP. 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’s truck price remained at $1,050/st FOB for trucks and $1,045/st FOB for rail shipments.
U.S. Gulf: Depending on who you ask, NOLA phosphate barges were either in over abundance or undersupply last week. Regardless of the supply situation, phosphate barge prices on the country’s river system were on the decline again last week.
While barge sales were dragging a bit, business at warehouses was brisk last week. Farmers were making their buys a bit later than normal this year due to the heavy rains, and dealers’ bins were beginning to empty. In some areas where sales have been slower this season, such as Missouri, some dealers were reselling a portion of their supplies at prices well below the NOLA price, around $920-$940/st FOB for DAP by the truckload. In many cases, the product was purchased for several hundred less than the truckload price. While that movement will probably slow new prompt sales of phosphates and hold down prices for a couple of weeks, that trend was not likely to continue. For the past two years the phosphate market has been driven primarily by the export market, where prices have risen dramatically. One of the main reasons the export market has done so well has been the declining value of the U.S. dollar, so much of the rest of the world has seen prices increase, but it has not been as gut wrenching as in this country. While prices in this country may decrease slightly or level off during the off-season, that will not continue once the fall season begins.
In areas such as northern Indiana and northern Ohio, where corn planting was delayed due to wet weather conditions, about 35 percent of the crop had yet to be planted. In Oklahoma, another area that received far too much rain this year, fears that the wheat crop would be damaged turned out to be unfounded. A source said apparently more phosphates were put in the ground last fall and the wheat crop was “excellent.” That makes it more likely that those farmers will be back in the market for more fertilizer for their next crop, because they will have the money to spend.
The Arkansas River, which has been a problem due to high levels and a fast current, was returning to more normal conditions by last week. However, fertilizer sales in that area had already tapered off, and many of the barges that had been fleeted at Rosedale had been diverted to other locations, thinning traffic on the river.
Based on actual NOLA DAP barge sales last week, the price range fell slightly, from $990-$995/st FOB the previous week to $980-$987/st FOB. MAP barges were available at prices $25-$75/st FOB more than DAP. Mosaic’s asking price for forward sales from June through August was $1,090/st FOB for DAP and $1,105/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: DAP was reported in a broad range at $1,025-$1,075/st FOB, with MAP reported at $1,050-$1,090/st FOB. Forward contract DAP tons for July-September were being referenced for as high as $1,104/st FOB Peoria, Ill., and $1,107/st FOB Cincinnati, Ohio. Sources reported no current pricing levels for 10-34-0 in the region.
Western Cornbelt: Phosphate pricing was actually down slightly on the spot market, with sources quoting the regional warehouse market at $1,000-$1,040/st FOB to the dealer. MAP was pegged at $1,025-$1,055/st FOB, with few new sales reported to test the market. “Once you hit the $1,000/st mark, orders are few and far between,” said one source.
On a forward contract basis, however, reference levels remained at higher levels to reflect true replacement costs. One supplier was referencing DAP for July-September at $1,104/st FOB St. Louis, Mo., $1,107/st FOB Inola, Okla., and $1,110/st FOB Pine Bend, with MAP posted at $1,182/st FOB Inola and $1,185/st FOB Pine Bend for the same shipping period.
10-34-0 remained in very tight supply at $900-$950/st FOB in the region.
California: DAP was unchanged at $1,170-$1,175/st FOB or DEL in the region, with MAP at $1,155-$1,160/st FOB or DEL. 10-34-0 remained at $566-$576/st FOB in the state, but sources said a near-term increase is very likely. 16-20-0 was steady as well at $615-$622/st FOB.
May pricing levels were still in effect for super phosphoric acid (SPA) and merchant grade acid (MGA), with reference levels for both products at $13.20/unit DEL in California. Simplot’s MGA postings also included $13.40/unit FOB Lathrop and El Centro, Calif. Sources said a big increase is expected the first of June, but new pricing levels were not yet confirmed at press time.
Pacific Northwest: Several sources reported that summer fill MAP was being offered at $1,050/st DEL in the region, but one supplier said the order period would end May 30 for shipments in July and August. Spot market tons remained at $1,145-$1,160/st DEL or FOB for MAP, with the low in Montana, and $1,160-$1,175/st DEL for DAP, with the low again for delivered tons in western and central Montana.
16-20-0 remained at a firm $615/st DEL in the region. 10-34-0 was reported in a very broad range at $670-$715/st FOB. One source said 10-34-0 postings were still as low as $563/st FOB in the region, but a readjustment in list prices was imminent.
SPA and MGA remained at $13.20/unit DEL in the region, but a significant increase was expected in early June on those products as well.
Western Canada: The MAP market was unchanged at $1,335-$1,370/mt DEL in the region.
U.S. Export: Although PhosChem has pulled back from the export phosphate market, Transammonia was said to have made a sale of 10,000 mt of DAP and 10,000 mt of MAP into Argentina at between $1,200/mt and $1,205/mt FOB. That would be the first known sale from the U.S. since India announced it had made buys at prices well below the previous export DAP range.
However, the situation in China will ultimately have an impact on the world market. With its exports halted even before the massive earthquakes, the loss of more than a million tons of phosphates that would have hit the world market and helped hold down prices will be felt. How long was uncertain, but probably within a month.
The export DAP price range last week remained declined to $1,160-$1,205 mt, which was about $50/mt lower than the previous week.
Belarus: Belarus has signed contracts to acquire phosphate feedstock from Morocco, Syria, and Kazakhstan for its Gomel chemical plants, according to local press reports citing Belneftekhim Deputy Chairman Mikhail Osipenko. Reportedly, Russia, Gomel’s normal supplier, reduced supplies. Osipenko said Gomel plants are now at full capacity, saying the demand from the local market for phosphate fertilizer will be met, though exports have been affected.
POTASH
Eastern Cornbelt: The potash market was quoted in a broad range at $725-$830/st FOB regional warehouses for brokered or reseller tons, with reference levels reported as high as $860/st FOB on the secondary market.
Western Cornbelt: Potash pricing continued to firm, with sources quoting the regional market in a broad range at $725-$800/st FOB on the secondary market. Several sources reported that Russian potash barges had traded for as high as $800/st FOB the U.S. Gulf for prompt tons. “The market is moving up every week,” said one, noting as well that allocations from producers remain very tight.
California: Potash pricing was tagged at $614/st FOB for 62 percent white product, with delivered potash reported in a broad range at $700-$770/st, depending on grade and supplier.
Granular sulfate of potash (SOP) was steady at $815/st FOB in the state, with water soluble SOP referenced as high as $955/st FOB for bulk and $1,015/st FOB for bags. Great Salt Lake Minerals Corp., a subsidiary of Compass Minerals, announced that it will increase SOP postings by $75/st effective June 16. The new list price for standard, non-granulated SOP will be $733/st, while granular SOP will be $745/st at the company’s Ogden, Utah, solar evaporation plant.
Sources tagged the California potassium nitrate market at $1,160/st FOB for bulk and $1,230/st FOB for bags, with product supplies described as tight.
Pacific Northwest: The potash market was reported at $583-$615/st FOB, with the low reflecting May pricing levels and the upper end reported for June. One source said June pricing levels should be even higher, and talked of a possible $630-$640/st FOB range.
Agrium’s 60 percent red premium potash postings for the July 1 forward shipping period include $636/st rail-DEL and $641/st FOB in southern Idaho, Utah, and Oregon’s Malheur County; $641/st rail-DEL and $646/st FOB in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $646/st rail-DEL and $651/st FOB in Oregon’s Willamette Valley.
SULFUR
Tampa: A sulfur vessel loaded with about 28,000 mt of prill from Conoco will be leaving Beaumont for Morocco during the last half of June. What was not known was the price. A source said the oil company has a long-term contract at prices well below the current world market, but if not, it could easily bring $700/mt FOB or better.
With the summer driving season about to begin, refineries were producing more fuel and sulfur than they have for the past several months, which should help supply. Surveys have shown many people will be taking vacations closer to home because of the high price at the pump, which could impact sales of gasoline. Whether that would affect refining activity was not clear. However, the supply situation has been so underwhelming that the name of the game was catch up – and that will probably not happen.
So, what will sulfur producers seek for third quarter contracts? While world prices have not escalated as much as during the previous quarter, they have continued to go up, and the price U.S. phosphate producers agreed to pay for the second quarter was about $200/t less than the rest of the world. Some in the industry thought it might be less than $200/lt up from this quarter, while others think the oil companies will seek $200/lt or somewhat higher. It’s too early to tell.
Hurricane season began this week. If even one goes into the Gulf or hits Central Florida, the sulfur market will be impacted. The forecast was for a very active storm season, but that was the same as the two previous years, when none reached land. Hurricane season is never a good bet.
MARKET NOTES
Brazil: High fertilizer prices may spur Brazil to nationalize privately-held mineral deposits, according to a recent Reuters report citing Agriculture Minister Reinhold Stephanes. The country is reportedly eyeing all mineral deposits that might contain potash and potassium. Reportedly, it would either give these assets over to state-run companies or to those in the private sector that would lower prices. The good news for private enterprise is that Brazil imports most of these products. Brazil imports some 80 percent of its potash and 60 percent of its phosphate, according to estimates.
Poland: Polish Agriculture Minister Piotr Sawicki has accused the fertilizer industry of conspiracy in the price hikes of fertilizers. In a TV statement, Sawicki said that fertilizers plants acting together have raised “without any need” mineral fertilizers by 16 percent, phosphate 26 percent, and nitrogen by 28 percent in last months. Sawicki said he would strictly control all fertilizers plants, including the Police, Pulawy, and Ketrzyn plants, which deliver most of fertilizers and produce for export.
Sawicki’s accusations were vigorously rejected by all plants. Ryszard Kazimierczuk of the Police plant said that “there were price hikes of other products for our plants,” and another company official cited the free market and the law of supply and demand.
India: Sterlite Industries, the principal operating company of Vedanta Resources Plc and a leading world-class copper manufacturer in India, is planning to expand its copper smelter and refinery, sulfuric, and phosphoric acid plant capacities in India. As a result, it has put out the word with equipment suppliers.
Scotland: Two dead stowaways from Tunisia were found on the vessel Pascal, which docked at the Ayr Harbor May 26, according to the local press. The vessel was believed to have loaded phosphate May 15 in Sfax and stopped in Spain for refueling. Authorities had to take some time to interview the mostly Russian crew. Foul play was not suspected.
J.R. Simplot, a rags-to-riches Idaho billionaire who built an international agribusiness empire, died at his downtown Boise condominium May 25, seven months shy of turning 100. Forbes Magazine in 2006 listed the wealth of Simplot and his family at $3.2 billion, ranking him 80th on its list of richest Americans.
Simplot President and CEO Larry Hlobik notified all Simplot company employees by e-mail early Sunday afternoon that their company’s founder had died about 11 a.m. that day.
“J.R. was the most beloved figure in our organization and a man we all admired very much,” Hlobik said. “You know that a person might not be with you for that much longer when they reach 99 years of age as Mr. Simplot had in January, but this is still a shock. He was one of those people who seemed like they could live forever.”
The J.R. Simplot Co.’s extensive holdings have included fertilizer mines and manufacturing plants, cattle ranches, potato processing plants, and grain storage facilities. In 1980, when he was 71, Simplot invested $1 million in what would become Boise-based Micron Technology, a major producer of DRAM computer memory chips. Simplot’s investment grew to $20 million, and he was the company’s largest shareholder.
Almost 30,000 people work for companies Simplot founded or financed. As of 2006, the J.R. Simplot Co. had 3,500 Idaho employees (10,200 worldwide). Micron employs about 19,000 workers in the U.S. and abroad.
Simplot donated his house in Boise’s foothills to Idaho for use as a governor’s mansion.
Simplot is survived by his wife, Esther; two sons, a daughter, and several grandchildren. The family scheduled a private funeral, but arranged a public memorial service for 2 p.m. Sunday, June 1, at the Qwest Arena in downtown Boise. Simplot will be buried at a mausoleum at the Morris Hill Cemetery.
CF Industries Holdings Inc. reports that Randall Selgrad has been elected vice president, treasurer, and assistant secretary of the company. Selgrad had been treasurer and assistant secretary since joining the company in February 2007. Prior to joining CF, Selgrad, 49, served as assistant treasurer for Hospira Inc., Lake Forest, Ill. Before that, he held a number of treasury and financial positions with Abbott Laboratories. Selgrad holds a Bachelor of Science Degree in Management/Computer Science from Purdue University and earned a Master of Business Administration degree in Finance/Accounting/Statistics from the University of Chicago.
Ridley Terminals Inc., (RTI), Prince Rupert, B.C., on May 23 announced that George Dorsey has been appointed RTI’s president and CEO, effective immediately. Dorsey is CEO of Edgewood Holdings LLC. He has served in varied senior management roles at Coffeyville Resources, Aquila Energy, Duke Energy, Euro Brokers Inc., Associated Metals and Minerals Corp., Pechiney Ugine Kuhlmann, and Merrill Lynch. His industrial experience covers several commodities. He serves on the board of directors of Traxys SA, a firm with world-wide commodity sales exceeding $2.5 billion.
Greg Slocombe, president and chief operating officer, and Cam McIntyre, chief financial officer and operations manager, have resigned from RTI. RTI’s board issued a statement saying it was grateful to these managers for their years of service and wishes them well in their future endeavors.
“RTI is a key strategic asset to Canada as a critical gateway to Asian and other world markets,” said Daniel Veniez, RTI chairman. “Our board and management team will place an aggressive and focused emphasis on attracting new business, developing creative and stronger partnerships throughout the supply chain, and investing heavily to improve our productivity and service to customers.”
RTI is a bulk handling terminal located on Ridley Island in Prince Rupert, B.C., with a capacity of 16.5 million mt. A Federal Crown Corporation, RTI is mainly a coal terminal, but can handle other bulk cargoes.
Toronto-TriNorth Capital Inc. participated in an $80 million private placement offering of MagMinerals Potash Corp. securities that closed on April 4, 2008. TriNorth invested $3 million in MagMinerals at $4.00 per share for 750,000 shares. It is anticipated that MagMinerals will go public before the end of 2008. MagMinerals has exclusive rights to one of the largest carnallite deposits in the world, in the Republic of Congo, with potash production expected to commence in Q1 2011. “TriNorth is currently evaluating several early stage investments in the fertilizer space,” said Ravi Sood, president of Lawrence Asset Management Inc., the manager of TriNorth. “We expect the fundamentals for fertilizers and potash in particular to remain compelling for some time. MagMinerals is an advanced project with an excellent management team and a path to liquidity already in place, making it an attractive investment for TriNorth.” TriNorth is a Canadian-based investment company that invests in a diversified portfolio of companies to generate long-term capital growth for shareholders. TriNorth takes an active interest in its investee companies from the earliest stages, providing strategic and financial counsel, support, and direction to assist in their growth and success.
Beaverton, Ore.-Absorbent Technologies Inc. (ATI) has announced the recent signing of a marketing agreement in the United Kingdom for its Zeba water-saving soil amendment, which works below the soil surface to absorb and release water to plant roots as needed. ATI officials said the arrangement is with Pluvium Ltd. to market the patented starch-based hydropolymer throughout the UK. “The Pluvium distribution agreement helps to expand the global availability of Zeba and provide a chance for customers world-wide to benefit from the technology,” reported Larry Logan, chief marketing officer of the Zeba brand. “Together, we look forward to increasing the quality and playability of sports fields and courses throughout the United Kingdom, while reducing maintenance costs.” Logan noted that Zeba was recently named Turfcare Product of the Year by Turf Professional magazine in the UK, which features turf industry innovations. At the same time, ATI is claiming significant successes with large-scale growers of potatoes, tomatoes, sugar beets, and dry beans. “Zeba, which helps plants establish a stronger root system, resulting in a healthier, stronger plant using less water, pretty much can be used on anything,” boasted Southwest Sales Manager Todd Bridges. Bridges told Green Markets that ATI is also working with Fresno State and area retailer Gartootelian to improve quality and tonnage for alfalfa producers in Fresno County. Bridges explained that the starch-based hydropolymer was originally developed by the U.S. Dept. of Agriculture and licensed to ATI by USDA. He said applications are generally blended with liquid or dry fertilizer, but also can be applied directly. He described the main ingredient as cornstarch, which attaches with the polymers to produce a 95 percent water release, whereas crosslinked polymers also absorb and hold 200 to 300 percent their weight, but only release 20 percent.
Waseca, Minn.-Studies by the Agriculture Utilization Research Institute (AURI) could result in a new source of phosphorus, potassium, and micronutrients for crop fertilizer from the ash of biomass. According to AURI, the effectiveness of ash left after burning crop residues for energy will be evaluated as corn fertilizer on test plots at the University of Minnesota’s Southern Research and Outreach Center here. “Many ag-processing facilities generate ash, which is often spread on cropland. But every kind of ash is a little bit different,” reported UM Soil Scientist Jeff Vetsch, who will lead the research trials. The ash from burning turkey litter to generate electricity is being marketed in a limited area in Minnesota by Cargill, but so far there’s little experimental evidence demonstrating how field crops respond to biomass ash, Vetsch reported. “That’s why we are doing these trials. We want to see how available the nutrients are compared to conventional fertilizers. We expect to show growers that ash waste is a valuable source of fertilizer, and that there are no negative effects on crop production.” In general, he noted, agricultural ash contains about 200 to 300 pounds of phosphorus and potassium per ton, plus important micronutrients such as sulfur and zinc, but very little nitrogen. Vetsch added that ash’s high pH may provide a small liming effect as well.
Boston, Mass.-Converted Organics Inc. (CO) has begun processing seafood by-products supplied by Pacific Choice Seafood, a Pacific Seafood Group company based in Eureka, Calif. CO will sell and distribute the fish-based organic fertilizer products for use in commercial, retail, industrial, and recreational lawn care in the United States, Eastern Canada, and Puerto Rico. Two such products were expected to be on the market in April. CO said the move will prevent thousands of pounds of by-product from entering the waste management system in the U.S. annually.
Dover, Del.-A Delaware State University professor says he is developing a fertilizer that resembles charcoal by combining and cooking leaves, wood chips, and chicken manure. Inventor Dr. Mingxin Guo claims that what he’s calling “biochar” allows soil to absorb more water and nutrients, reducing the need for water. Gou says another benefit is that the chalky substance stays in the soil for hundreds of years. And, he claims, biochar is environmentally friendly by reducing carbon dioxide emissions.
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.
