The Charlotte County, Fla., Commission voted 7-1 on March 19 for regulations to restrict the application of fertilizers near waterways, joining several other counties passing similar ordinances in the state, according to local media reports. Charlotte’s ordinance, which is somewhat less strict than one passed by nearby Sarasota County last year, limits the amount of fertilizer that can be used and requires greater use of timed-release products.
The county rejected an initial setback of 10 feet from water, however, and replaced that with a three-foot setback if a curtain is used. In addition, it dropped a prohibition against using fertilizers from June until the end of September, which is the rainy season in Florida. Lawn care operations must also become certified through a training course, which will cost $25 per class.
Fertilizers flowing into waterways in the state have increased algae blooms and, possibly, red tide, which can be deadly to marine life and disastrous for the tourist business.
More aggressive measures were announced in Manitoba last week. Beginning next year, farmers in the province will no longer be allowed to apply fertilizers near rivers, lakes, wetlands, streams, or drains. After nearly five years of deliberation on the issue, the provincial government on March 18 announced new regulations that will apply to farms, wastewater treatment plants, golf courses, parks, and homeowners.
The regulations, many of which will start in January 2009, divide the province into water quality management zones, each with their own set of fertilizer limits that farmers must follow using soil tests. Common to all zones is the establishment of a buffer zone of at least three meters along all waterways in the province, within which farmers, homeowners, and groundskeepers will no longer be allowed to apply fertilizers. The buffer zone will be 15 meters along rivers deemed by the government’s water protection plan as “vulnerable” that are also drinking water sources, including the Red and Assiniboine rivers, as well as along lakes not considered vulnerable. Around vulnerable lakes and reservoirs, including Lake Winnipeg and Lake Manitoba, the buffer will be 30 meters. For areas not covered in permanent vegetation, the buffer zones increase to 8 meters along all waterways, 20 meters along vulnerable streams, rivers, and creeks, as well as all lakes, and 35 meters along vulnerable lakes and reservoirs.
The regulations will also block the siting of confined livestock operations, manure storage pits, outhouses without a composting pit or holding tank, and sewage and wastewater treatment facilities in the buffer zones or in specified water quality management zones. In addition, the regulations will prohibit the city of Winnipeg from spreading city sewage sludge on fields during the winter months after 2010, and will prohibit golf courses from using any fertilizer unless soil tests prove that the nutrients are needed. The regulation also puts new limits on development of septic fields, manure storage facilities, and sewage treatment plants in areas labeled as environmentally sensitive.
“Along with livestock and grain producers, other Manitobans such as cottagers and golf course owners will have clear regulations to guide how nutrients can be applied to land to better protect water quality,” provincial Water Stewardship Minister Christine Melnick said.
The regulations, along with an earlier move by the provincial government banning new or expanded hog operations in Manitoba’s southeast, Interlake, and Red River Valley regions, have drawn criticism from a coalition of agricultural groups, including The Manitoba Pork Council (MPC) and Keystone Agricultural Producers (KAP).
“This is completely unfair to farm families who are already working hard to protect the environment by following all of the provincial regulations and guidelines,” said MPC chairman Karl Kynoch. Added KAP President Ian Wishart, “This ban not only puts one of Manitoba’s agricultural sectors in jeopardy, (it) is a threat to all of us in agriculture.”
Melnick said further restrictions will be announced for the use of lawn fertilizers later this spring. Earlier this year, Manitoba became the first Canadian province to ban application of lawn fertilizers containing phosphorus in residential areas (GM Jan. 7, p. 14).
There are also restrictions coming over the next few years on the application of nitrogen and phosphorus to all types of land in the province, local reports said. Specific limits on N and P will depend on whether the area is high-yield farmland, grazing pasture, or urban, however.
The House Homeland Security Committee on March 6 approved the Chemical Facility Anti-Terrorism Act of 2008 by a vote of 15 to 7. The legislation (HR 5577), which would permanently authorize the U.S. Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards (CFATS) regulations, included a controversial provision requiring chemical facilities to assess the feasibility of using inherently safer technologies (IST) at their plants.
According to the Agricultural Retailers Association, a large portion of the committee debate centered on the IST provision, which ARA and The Fertilizer Institute have vehemently opposed in past Congressional efforts at chemical security legislation. ARA said an amendment offered by Rep. Dan Lungren (R-Calif.), ranking member of the Subcommittee on Transportation Security and Infrastructure Protection, to require only “high-risk” tiered facilities to conduct an IST assessment was defeated.
ARA was part of a coalition of industry groups that sent a letter on Feb. 26 to committee members opposing the inclusion of the IST provision in the current bill. ARA said it “supports permanently authorizing the current DHS chemical security regulations, but expressed strong concerns to committee members that an IST mandate could jeopardize the availability of lower-cost sources of plant nutrient products or certain agricultural pesticides used by farmers and ranchers.”
HR 5577 is now expected to be referred to the House Energy & Commerce Committee for consideration.
A report released by the Center for Biological Diversity, WildWest Institute, and 50 other environmental organizations charges that Idaho’s proposed roadless plan would allow 8,000 more acres (in addition to 10,000 acres already leased) for phosphate mining in the state’s roadless areas.
“If this proposal moves forward, mining companies will be permitted to turn some of Idaho’s most pristine landscapes into Superfund sites that would continue to contaminate waterways for generations,” states the report, entitled “Wild at Heart: Saving the Last of America’s Roadless Backcountry.”
The report also says a Bush administration plan to give Idaho more control of its 9.3 million acres of roadless areas could set a precedent for increased mining, logging, coal, oil, and gas exploration, and road building in roadless areas of other states.
According to the U.S. Forest Service, one-third – or 3.2 million acres ?Çô of Idaho’s protected acres would be managed in a manner that retains “natural processes and roadless characteristics” under the proposed rule, the report states. The remaining six million acres (the size of Massachusetts) would lose existing protections, the environmental groups said, noting Idaho’s 9.3 million roadless acres are part of the last intact forest ecosystem in the lower 48 states – the Greater Yellowstone Ecosystem.
Located in eastern Idaho, western Wyoming, and northern Utah, the Caribou-Targhee National Park abuts the Yellowstone and Grand Teton national parks in that ecosystem. The United Nations has designated the region as a “Biosphere Reserve,” the report says. The forest contains 50 separate roadless areas extending over 1,478,000 primitive Idaho acres.
The Bush administration plan would replace the 2001 Roadless Area Conservation Rule imposed by the U.S. Forest Service during the Clinton administration, which prohibits new roads for logging and other commercial development in the nation’s forests. David Hensley, counsel to Idaho Gov. C.L. “Butch” Otter, said the proposed plan strikes an appropriate balance between the national concerns for the roadless areas and local needs.
The “Wild at Heart” report says the Bush administration is proposing to open 251,800 acres of roadless areas in the Caribou-Targhee forest to new development and associated road construction. It also would allow 12,100 acres of new phosphate mines and related road work, resulting in up to 545 million tons of phosphate extracted and transported, it says. The J.R. Simplot Company, Agrium, and Monsanto operate phosphate mines within the forest. Opening the region to more phosphate mining would expose waterways to the threat of selenium contamination and threaten wildlife, fisheries, and recreational opportunities, the report says.
Idaho’s petition is the first state petition to relax roadless restrictions under the Bush plan. In January, the federal government announced the release of a draft rule based on Idaho’s petition submitted to the Forest Service in the fall of 2006 by then-Gov. Jim Risch, which also has been endorsed by Otter, his successor.
Moscow-The Russian government on March 18 approved export duties on fertilizers until April 2009 to reduce the cost of the nutrients for domestic grain producers. Nitrogen fertilizer exports will be subject to a tariff of 8.5 percent of the customs value and potash fertilizers will have a 5 percent tariff, the government said. The government also said it would raise the export tariff on fertilizers containing nitrogen, phosphorus, and potash blends in packages not exceeding 10 kg (22 lb) to 8.5 percent, up from the current 5 percent. The tariffs will become effective one month after the official publication of the order, and will remain in effect until April 30, 2009, the government said in a statement. Agriculture Minister Alexei Gordeyev was quoted as saying that 90 percent of mineral fertilizers produced in Russia are exported and only 10 percent used domestically. Gordevev said in a separate statement that the government intended to use 7-10 billion rubles (US$297.5-$425 million) generated by the new tariffs to buy additional fertilizer for Russian farmers.
Calgary, Alberta-Agrium Inc. announced on March 18 that Profertil S.A. and the Argentine government have reached an agreement to put a cap on the price of urea to provide improved input cost predictability for Argentine growers. The agreement establishes a ceiling for the urea price to growers at the current selling price of $410 per tonne for the upcoming growing season. The Profertil facility, the largest single train urea plant in the world, experienced significant downtime due to reduced gas availability during the winter of 2007, Agrium said. News reports said that farmers in Argentina were squeezed by fertilizer shortages last year, partly due to the gas supply-related outages at the Profertil plant. The Argentine government has indicated that ensuring an adequate supply of urea to farmers is a priority. “This priority, along with steps being taken by Profertil, is expected to minimize the risk of downtime due to gas supply interruptions through the 2008 winter,” Agrium said. The Profertil operations produce anhydrous ammonia and urea. Profertil S.A. is 50 percent owned by Agrium Inc. and is an Argentine-based manufacturer and wholesale distributor of nitrogen products. Agrium’s partner in the plant is Spain’s Repsol YPF.
Ottawa, Ontario-There may be a truce of sorts in the war of words between Canadian farmers and retailers over which one can better secure ammonium nitrate imports from Russia and other fertilizer imports that may follow (GM March 10, p. 12). Farmers of North America, which touched off the disagreement last fall when it brought in a freighter of AN for members, is accepting an invitation to join the Fertilizer Safety and Security Council established by the industry to promote safe fertilizer practices. FNA Chief Operating Officer Jason Mann confirmed that he had received the invitation from the Canadian Fertilizer Institute and planned to reply in the affirmative. David MacKay, executive director of the Canadian Association of Agri-Retailers (CAAR), told Green Markets he considered Mann’s response a positive move. “It always helps to have all the stakeholders at the table,” MacKay stated. “It’s an excellent gesture and I applaud CFI for extending it.” He added that he expects the deliberations “will be contentious but it’s still better to have an open dialogue.” After the Russian freighter docked at Churchill, Manitoba, just before Arctic ice closed the shipping lanes, CAAR suggested that its retailers were better equipped to keep the product from falling in the wrong hands – or would be with some financial help – than the farmers who are storing a lot more N-based fertilizer in bulk without having to take the responsibility. Mann and the FNA, however, charged that CAAR’s position on the issue was less about security and more about control and distribution. It’s still not clear how growers will be affected by the Ammonium Nitrate Code of Practice developed by the fertilizer council in partnership with the explosives regulatory division of Natural Resources of Canada. Noting that the code is still to be implemented, CFI President Roger Larson said that the organization expects anyone who imports fertilizer materials into Canada to meet both the spirit and the technical requirements of the code. Larson added, “All businesses need to step up to protect the safety and security of Canadians.” CFI Vice President David Finlayson, who serves as executive director of the fertilizer council, personally issued the invitation for FNA “to participate in the council and have a direct role with the AN Code of Practice, which includes standards for appropriate security and storage.” Mann said he received the invitation and an application by email earlier this month and will be sending an acceptance. He added that his alliance has no problem working with CFI and supports a code for handling AN “as long as it’s about security issues and not about trying to control distribution.” Actually, Mann heard from CFI right after the Russian shipment came in last October and asked for an application but never received it. “We’re willing to comply with what the government has proposed,” he added, “but it has to be practical and not create a barrier to our importing.”
Calgary, Alberta-Agrium Advanced Technologies, a division of Agrium Inc., announced on March 17 that it plans to close its controlled-release turf fertilizer facility in Alabama’s Mobile County in mid-June, citing the rising cost of raw materials. Local reports quoted Agrium Spokeswoman Lisa Parker as saying four full-time employees and five contractors will lose their jobs as a result of the closure. Originally operated as I.B. Chemical Co. by Mitsubishi Polysilicon, the plant was purchased by Canadian NuGro Corp. in 1999. NuGro was purchased by Spectrum Brands, St. Louis, Mo., in 2004, and Agrium acquired NuGro from Spectrum in 2006. Arnold Cleghorn, vice president of manufacturing, said in a statement that the decision to close the plant was difficult. It will continue operating over a period of weeks to fill customers’ immediate needs, Cleghorn said, while future orders will be filled by other companies under the Agrium umbrella. Agrium’s controlled-release fertilizer portfolio includes ESN® and Duration CR®, as well as the group of products acquired when Agrium purchased Alabama-based Pursell Technologies Inc. in 2006. These includes Polyon® polymer coated fertilizers, Trikote® polymer sulfur-coated fertilizers, and Precise® controlled release crop protection products.
Tulsa, Okla.-Terra Industries has been honored by Tulsa and Indian Nations Council officials for playing a major role in improving air quality and assisting the city in meeting its ozone reduction commitments with EPA. Tulsa Mayor Kathy Taylor and Indian Nations Council of Government’s John Selph were joined March 13 by Terra Vice President of Manufacturing Richard Sanders and local business and industry representatives at a special gathering to announce Terra’s voluntary effort to reduce nitrogen oxide (NOx) emissions from its Tulsa nitrogen facility by approximately 425 tons per year. Terra Nitrogen is installing ultra low NOx burner technology to an existing ammonia reformer, reducing NOx emissions by approximately 60 percent at a projected cost of $2 million. “Cleaner air is on the horizon for the Tulsa area thanks to efforts of Terra Nitrogen,” said Mayor Taylor. “We congratulate them for this significant contribution to our air quality.” Selph added, “The Tulsa area has a rich history of achieving air quality standards through voluntary and cooperative efforts. Although Tulsa currently meets the federal ozone standard, we can’t be sure we will continue to meet the standard and remain off the ‘dirty air list’ without aggressive commitments such as the remarkable contribution Terra Nitrogen brings to the air shed today.” Terra Nitrogen, a subsidiary of Terra Industries located just east of the Port of Catoosa, is the largest nitrogen fertilizer producer in the U.S. Terra spokesman Joe Ewing told Green Markets that the new burner designs available today reduce NOx emissions through improved fuel mixing, which lowers the flame temperature. This is associated with the primary reformer burners in the ammonia plants where natural gas is burned for fuel. “Terra is honored by this recognition from the Tulsa area community,” said Ewing, VP for investor relations and human resources. “We are pleased to continue our ongoing efforts to improve air quality and look forward to continuing our close relationship with Tulsa.”
Toronto-MagIndustries Corp. said March 4 that it has entered into an agreement with a syndicate of agents co-led by Cormark Securities Inc. and Paradigm Capital Inc., and including Desjardins Securities Inc., Jennings Capital Inc., and Ambrian Securities plc, to sell, on a best efforts basis, approximately C$100 million of equity in the capital of the company’s subsidiary, MagMinerals Inc., by way of private placement. The net proceeds will be used by MagMinerals to fund the repayment of approximately ?é¼15 million in project related debt, with the remaining funds to be applied to the development of Phase I of the company’s potash project near Mengo in the Kouilou province of the Republic of the Congo, as well as the completion of a feasibility study update for Phase II. Subsequent to the offering, the company intends to cause MagMinerals to become a reporting issuer in one or more provinces of Canada through an initial public offering, reverse takeover, or similar transaction.
U.S. Gulf/Tampa: Serious negotiations for new monthly ammonia prices won’t begin for another week, but expectations were that it will take a slight dip in April from the March price of $635/mt. Buyers said that following April, prices should begin to drop rapidly from the current $635/mt Tampa price “by triple digit increments.” The reason for the anticipated decline was a lack of demand, which was normal for this time of year, and prices should continue to fall until June.
Gulf barge prices, which were at $610/st last week, were expected to follow a similar course. Sales at the Black Sea were said to have fallen off while potential buyers wait for a price drop.
Eastern Cornbelt: The anhydrous ammonia market was quoted at $665-$695/st FOB in Illinois last week, with the low for spot tons and the upper end for fall prepay. An Indiana source also reported booking some fall prepay ammonia at the $700/st FOB mark or slightly higher.
Western Cornbelt:Anhydrous ammonia continued to be quoted at $650-$670/st FOB for prompt tons. Sources said some fall prepay tons had been booked at levels ranging from $685-$690/st to numbers slightly north of the $700/st FOB mark. One source said fully 20-25 percent of his company’s projected fall ammonia needs had been locked in.
Southern Plains: Last week’s weather delays had some sources talking about the likely impact on preplant anhydrous ammonia movement. While some were predicting a switch to urea or UAN when growers are able to get back in the field, others said they “wouldn’t call it quits on ammonia just yet.”
The ammonia market last week was quoted at $570-$590/st FOB for spot tons, with the low out of regional production points and the upper end to dealers FOB pipeline terminals in Kansas. Sources talked of forward contract ammonia being offered in a wide range at $600-$625/st FOB, depending on location and shipping period.
South Central: The anhydrous ammonia cash market was tagged at $610-$640/st FOB regional terminals to the dealer, with the low FOB Memphis, Tenn., and the higher numbers out of more northerly locations.
California: Effective March 24, Agrium’s anhydrous ammonia postings are scheduled to firm to $750/st truck-DEL in Central California and $755/st truck-DEL in Northern California. Calamco’s reference prices in California moved on March 18 to $750/st truck-DEL and $765/st rail-DEL, with aqua ammonia moving to $200/st FOB from the previous $185/st FOB.
UREA
U.S. Gulf: Heavy rains pounded much of the Midwest last week and the water had a negative impact on the sale of almost every fertilizer, but urea was especially hard hit. Some areas received as much as 13 inches of rain. Barge traffic on the Arkansas River was complicated by a heavy flow and rapid current. Similar problems may occur in the northern areas of the Mississippi River due to rain and heavy snows this winter.
Early in the reporting period the price of granular urea barges began to rise, and at least one sale was made at $370/st FOB the Gulf. As demand fell sharply, however, the price settled to $360-$365/st FOB. Several players said they anticipate the price will continue to soften. Prilled urea was nearly the same as the previous week, moving to $350-$356/st FOB from the prior $350-$355/st FOB range.
Eastern Cornbelt: Granular urea was quoted at $420-$445/st FOB in the region, with the low reported out of spot river locations in Illinois and Ohio. The dealer market FOB E. Liverpool, Ohio, was reportedly referenced at the $445/st FOB level last week.
Western Cornbelt: Granular urea was quoted in a fairly broad range at $410-$430/st FOB, with the low on a spot basis in Missouri and the higher numbers reflecting dealer reference pricing in Iowa. The dealer market FOB St. Joseph, Mo., was pegged at the $420/st level last week. Another Iowa source quoted delivered urea at the $430/st level, which he said was up slightly from earlier pricing.
Southern Plains: The granular urea market was quoted at $400-$410/st FOB Inola and Enid, Okla. Several sources quoted a firm $405/st FOB level at the port at midweek. The previous week’s heavy demand would probably have resulted in spot pricing increases if last week’s weather delays hadn’t come into play. As it was, the barge traffic restrictions on the Arkansas and the brisk application pace at mid-month had some sources predicting tight urea supplies, but that was not the case last week.
Sources said Koch’s urea plant at Enid, Okla., was back up and running after a brief outage during the prior week due to a maintenance issue.
South Central: Granular urea was quoted at $410-$420/st FOB regional terminals, with most dealer quotes reported at the lower end of that range. A Mississippi source reported some aerial applications of urea underway on wheat last week. Some dealers were topping off bins after a period of brisk movement in late February and early March, which included urea and ammonium sulfate in topdress applications on winter wheat.
Southeast: Granular urea pricing was down from last report, with the dealer market pegged at $425-$435/st FOB port terminals in the region.
India: MMTC awarded about 600,000 mt in its tender. The buyer was hoping to get commitments well into September, but at the end of the day only one company was awarded a contract for delivery past June.
Toepfer was the big winner, with awards totaling 150,000 mt for April-September shipments without having to take a price reduction. Each month the company will ship 25,000 mt into either Kandla or Vizag.
By and large, MMTC had to pay what was offered. In a couple of cases the final price was lower than the offered price.
Sources say the original Helm price was based on shipments extending into September. Now there is just one cargo of 50,000 mt, with an option for a second of the same amount set for April shipment. One trader commented this order was more like a prompt shipment than one aimed at the long term.
Because the Helm order is only for April, sources say the trading house was able to lower its price. Observers add Ameropa was in the same boat.
After MMTC announced the first round of purchases, it came back for more. Sources report that Swiss Singapore and IMR sold their offered tons at levels in the mid-$440s/mt CFR, which put their contracts in the same category as the other sellers.
A summary of the purchases follows:
Offering Company
Quantity
US$/mt
Shipment Month
FOB
CFR
Conagra
50,000
441
Mar-Apr
Toepfer
75,000
445
Apr-Jun
75,000
455
Jul-Sep
Helm
50,000
440
Apr-May
50,00 (S/O)
Sabic
75,000
404
Apr-Jun
Qafco
50,000
405
Apr-Jun
Ameropa
50,000
443
Apr
Swiss Singapore
100,000
Apr-Jun
IMR
35,000
April
Sources say this order will not begin to cover the needs of Indian farmers. MMTC had hoped to book the bulk of its 2008 requirement with this tender. However, the uncertainty of the global market caused many offering companies to shy away from making offers for the third quarter.
Buying will have to recommence quickly, said one source. Besides MMTC, observers expect to see IPL stepping up real soon.
Middle East: The MMTC tender locked in urea prices above $400/mt FOB for prills and granular. The large SABIC and QAFCO second quarter sales, combined with the regrets sent by Fertil and PIC, indicate that producers from the area are comfortable and see no need to soften their pricing ideas.
Black Sea: The MMTC tender and interest in Latin America combined to push prices up. Sources report business concluded at $400/mt FOB. One observer noted that with India coming back in and Latin American demand remaining strong, producers see little reason to modify their pricing ideas.
Adding to the upward pressure is a government announcement that a duty of 8.5 percent will be tacked on Russian nitrogen exports. The official pronouncement was expected by the end of last week. One month after the posting in the government gazette, the new tariff will take effect. The announcement on the government web site said the export duty will remain in effect until April 30, 2009. A portion of the income earned from the tariff will be used to purchase fertilizer and other inputs for Russian farmers.
NITROGEN SOLUTIONS
U.S.Gulf: Prices for nitrogen solution barges were basically stagnant last week, although the top of the range increased by $5/st, putting the range at $300-$310/st FOB the Gulf. Players indicated that prices may begin to soften. As was the case with urea and other fertilizer products, the heavy rain in the Midwest made new sales few and far between.
Problems on the Arkansas River continued again last week, with barge traffic slowed due to a high flow and fast current. The rain was expected to take a break for a couple of days, but the river will probably continue to face navigational headaches in the near term.
Eastern Cornbelt: UAN remained at $11.25-$11.65/unit FOB most regional terminals to the dealer. Ohio sources tagged the Cincinnati UAN-28 price at $316-$320/st ($11.29-$11.43/unit) FOB, depending on time of delivery. Inland reference prices remained as high as $12.15-$12.45/unit FOB at some locations in the region, but no business was confirmed at those levels. At the other end of the pricing spectrum, some Indiana sources talked of retail UAN-28 pricing in northern areas of the state for slightly under the $300/st mark DEL for large quantities to a retail buying group.
Western Cornbelt: UAN-32 remained at $11.20-$11.71/unit FOB regional terminals to the dealer, with the upper end reflecting dealer reference pricing in Missouri. One source pegged the common dealer price for UAN-32 last week at the $360/st ($11.25/unit) level FOB river terminals.
Southern Plains: UAN pricing was down slightly from last report. Sources tagged the dealer market last week at $11.09-$11.56/unit FOB terminals, with the low end reported at $355/st FOB Verdigris, Okla., for UAN-32.
South Central: Nitrogen solutions pricing was down from last report. Sources tagged the UAN-32 market in a broad range at $325-$350/st ($10.16-$10.94/unit) FOB regional terminals to the dealer, with the upper end reflecting the common dealer reference price.
Southeast: UAN-30 pricing was down slightly from last report. Sources tagged the market at $315-$318/st ($10.50-$10.60/unit) FOB Norfolk, Va., and Wilmington, N.C. The vessel market was indicated in the high-$340s to the low$350s/mt C&F.
AMMONIUM NITRATE
U.S. Gulf: Most bins were already full of ammonium nitrate last week, and trading was extremely light. With the heavy rains in the Midwest keeping farmers out of their fields, that situation was not likely to change until the weather improves. With little to no movement, barge prices fluctuated only slightly, from $355-$360/st the previous week to $350-$365/st FOB last week.
Western Cornbelt: Ammonium nitrate remained at $385-$395/st FOB in the region.
Southern Plains: Ammonium nitrate remained at $375-$380/st FOB Catoosa, Okla.
South Central: Ammonium nitrate was pegged at $370-$390/st FOB regional warehouses to the dealer, with movement described as limited due to the wet weather. The reference price FOB Yazoo City, Miss., was reported at the $375/st mark. An Arkansas source quoted the CAN-27 market at the $300/st FOB level to the dealer.
Southeast: Ammonium nitrate pricing was steady at $395-$400/st rail-DEL in the Carolinas, $395/st FOB Wilmington, and $390-$400/st FOB Tampa, Fla.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was firm at $295-$300/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was steady at $295-$300/st FOB.
Southern Plains: Granular ammonium sulfate was up from last report at $260-$290/st FOB in Texas. Postings FOB Plainview, Texas, moved on March 17 to $290/st for granular, $285/st for coarse, and $265/st for standard.
Effective March 17, American Plant Food Corp. firmed its granular ammonium sulfate postings to $260/st FOB Freeport, $270/st FOB Galena Park, $280/st FOB Fort Worth, and $290/st FOB Littlefield. Coarse potash postings from the company moved to $245/st FOB Freeport, $255/st FOB Galena Park, $265/st FOB Fort Worth, and $275/st FOB Littlefield, while standard grade postings firmed on that date to $235/st FOB Freeport and $265/st FOB Littlefield. APF’s postings for N-Pac Compacted product moved on March 17 to $275/st FOB Galena Park.
South Central: Granular ammonium sulfate pricing had strengthened to $295-$305/st FOB in the region. Several sources reported good sulfate movement on wheat earlier in the season.
Southeast: The ammonium sulfate market was reported at $275-$300/st FOB, with the low FOB Hopewell, Va. Reference prices from DSM Chemicals included granular sulfate at $300/st FOB Augusta, Ga., and $320/st DEL in Florida, and standard grade at $250/st FOB Augusta and $260/st DEL in Florida.
PHOSPHATES
Central Florida: With recent export sales running as high as $1,100/mt FOB, domestic prices continued to skyrocket last week. Mosaic made nearby sales of DAP railcars at $900/st FOB. The price will continue to rise. A price of $950/st FOB would convert to $1,050/mt, or roughly $45 FOB below the current export price.
While Mosaic has maintained equality between DAP and MAP prices, CF last week began asking a premium of $40/st for MAP over the price of DAP. “They don’t want to sell it,” one source said. Mosaic has production units geared specifically for MAP, but CF Industries does not. In order for CF to manufacture MAP, it must shut down its DAP operation. Although MAP does not require the use of ammonia, an expensive product, it does need a higher quality of phosphate rock and additional sulfur, and sulfur is very expensive and expected to take another sharp upward move for the second quarter.
With news of the Mosaic sale, the Central Florida DAP price range finally moved up from the $745-$795/st FOB of recent weeks to a flat $900/st FOB. Mosaic increased its asking price from $900/st to $950/st FOB for prompt shipments of DAP and MAP, after dropping its $4/st FOB discount for MAP. PotashCorp’s Central Florida reference price rose from $900/st to $950/st FOB beginning March 24. CF Industries’ most recent posted prices were $900/st FOB for DAP and $940/st FOB for MAP. Discounts for national accounts were no longer available. MAP supplies continued to be scarce.
In Texas, Agrifos’ price was $925/st FOB for trucks and $920/st FOB for rail shipments, but company officials were planning another price hike, which had still not been determined late last week.
U.S. Gulf: Cold temperatures in the Midwest have given way to warmer conditions, and that has created a whole new set of problems. The warm weather brought extremely heavy rain from North Texas to Pennsylvania. In addition, the snow in the far northern states and Canada began to melt. That means fields in all of those areas were muddy last week and farmers were forced to stay away. In addition, the amount of water flowing into rivers dramatically increased. Serious flooding could soon occur on the Mississippi, Illinois, and Ohio rivers, and barges were already having trouble moving northward last week.
On the Arkansas River, high water levels were not as much of a problem as was the rapid flow of the current, which closed the river. As a result, stalled barge traffic at Rosedale was beginning to stack up. There were no predictions when the situation would change, and some terminals were beginning to run low of phosphates, potash and (soon) urea.
The only area where fieldwork had begun was in some parts of western Kansas, which escaped the worst of the heavy rains. Oklahoma, which is normally the first to get to work, was still waiting for a break. A source said he was concerned that wheat farmers, who have suffered major crop problems the past two years in Oklahoma, may not be able to get the phosphate they need when they need it because corn growers have been snapping up available supplies. It may be hard for the wheat people there to get their share because of the financial losses they suffered the previous two seasons.
The few NOLA DAP barges that sold last week moved at the beginning of the period, before the worst of the weather. Meanwhile, terminal prices for phosphates were moving to reflect the barge market. Terminal postings for DAP included $920/st FOB on the Arkansas River and $950/st FOB on the Mississippi, and CF had moved its warehouse price for DAP to $1,000/st FOB in the upriver areas.
The NOLA DAP barge price range for the Gulf’s river system moved from $840-$895/st FOB the previous week to $905-$920/st FOB last week. Mosaic increased its asking price from $920/st FOB for DAP and MAP to $970/st FOB for both, while CF Industries’ most recent price list was $910/st FOB for DAP and $950/st FOB for MAP barges.
Eastern Cornbelt: Terminal prices for phosphates continued to firm to reflect current replacement costs at the U.S. Gulf and Central Florida. Illinois sources reported warehouse reference levels at $935-$950/st FOB for DAP and $940- $960/st FOB for MAP, and Ohio sources confirmed $960/st FOB reference levels to the dealer as well. An Indiana dealer said he was quoted a $960/st rail-DEL price for a DAP car last week. CF has reportedly moved its warehouse price for DAP to $1,000/st FOB in the upriver areas.
Retail prices continued to trail wholesale replacement costs, with very wide discrepancies reported in some areas. When that situation changes, several sources said they expect growers to kick back. “At some point there’ll be a major rebellion from the farmers,” said one Ohio dealer. “There will be huge cutbacks.”
10-34-0 remained at a firm $725-$750/st FOB for very limited spot tons.
Western Cornbelt: An Iowa source said his location saw very little winter spreading of phosphates and potash, so growers will be playing catch-up once they’re able to get in the field. Sources said retail pricing continued to lag behind current replacement costs. “We can only move up as fast as our competition will allow us,” said one dealer.
While there continued to be some talk of phosphates available in the $870-$875/st FOB range on the low end out of spot warehouse locations, most sources last week reported higher numbers. Both Iowa and Missouri sources reported warehouse locations now firmly at $925-$950/st FOB for DAP, with MAP reported at $940-$960/st FOB to the dealer. Still higher prices are imminent based on current replacement costs. One Iowa source said he was quoted rail-DEL prices last week north of the $1,000/st for new phosphate tons.
10-34-0 continued to be reported at $725-$750/st FOB for very limited tons, provided material could be found on the spot market. Agrium’s phosphoric acid postings were slated to firm April 1 to $1,160/st rail-DEL for both super phosphoric acid and merchant grade acid in Iowa, Missouri, Nebraska, Minnesota, and the Dakotas.
Southern Plains: Phosphate pricing covered a wide range due to rapidly firming replacement costs, and several sources said they expect that variance in spot pricing to continue through the spring application season. The DAP market was quoted at $870-$925/st FOB in the region last week. MAP was roughly $10/st higher than DAP, with several suppliers now referenced as high as $935/st FOB Catoosa to the dealer.
One source also reported a spot offer for DAP early in the week at the $910/st FOB level at the port. Still others reported reference levels as high as $940-$950/st FOB last week, but no actual sales were confirmed at those levels. “It’s confusing,” said one source. “You can easily get a $50/st discrepancy from call to call.” That source also said he encountered spot prices last week that were a full $125/st higher than the previous week.
With retail phosphate prices continuing to run well behind replacement values, one source said the big question going forward is “if the farmer is willing to buy $1,000/st plus retail phosphate?”
Most sources said 10-34-0 was simply not available due to extremely tight acid supplies. One source said he heard a “theoretical” $640/st FOB price last week, but it came from a supplier with no tons to sell. Another source said some spot tons might be available at the $750/st FOB mark or higher, but product was basically unavailable.
Agrium’s phosphoric acid postings were slated to firm April 1 to $1,160/st rail-DEL for both super phosphoric acid and merchant grade acid in Colorado, Wyoming, Kansas, Oklahoma, New Mexico, and Texas. That level was up dramatically from the company’s Feb. 1 list price of $940/st rail-DEL in those locations.
South Central: DAP and MAP were quoted at $825-$860/st FOB most regional warehouses last week, and sources said prices will climb quickly when movement begins in earnest. The current price quotes were well under replacement costs, but as one source noted, the market has firmed so quickly that “it’s hard to get your number in line with current replacement costs.” At least some suppliers had moved warehouse postings for DAP and MAP to as high as $925/st FOB in the region last week.
TSP was quoted in the $740-$770/st range FOB regional warehouses to the dealer.
Western U.S.: Agrium followed its March 17 price schedule for MAP with another increase slated for March 20. The company’s MAP postings firmed on that date to $1,025/st DEL in Montana and Wyoming; $1,030/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $1,030/st FOB and $1,035/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; and $1,040/st FOB or rail-DEL in California and Arizona. Those levels reflect a $30/st increase from the March 17 reference prices in those locations.
Agrium also announced new postings for phosphoric acid. Effective April 1, both super phosphoric acid (SPA) and merchant grade acid (MGA) will firm to $1,170/st rail-DEL in Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. That level is up dramatically from the company’s March 1 reference price of $960/st rail-DEL in those locations.
Simplot reported that it was also raising phosphoric acid prices on April 1, by $2.10/unit from March postings in its Western and Midwest locations. As a result, SPA and MGA postings from the company will move on that date to $11.70/unit DEL in California and the Pacific Northwest. In addition, Simplot’s MGA postings FOB local warehouses in California will firm on April 1 to $11.90/unit.
U.S. Export: After the export price of DAP/MAP hit the magical $1,000/mt FOB level, it just kept going. Last week, PhosChem made a sale of 6,000 mt into Central America at $1,050/mt FOB, then another small sale into the same area at $1,100/mt FOB, which also became its new asking price.
Other phosphate producing nations were taking steps to halt the flow of the product out of their countries to protect their own agricultural industries. Most recently, Russia imposed an 8.5 percent export tariff on phosphate exports, and China’s was 35 percent. Last week India and Brazil were still searching for additional supplies, which were hard to find. In Argentina, however, the government has sharply increased its export tariffs for grain and oil seed, and farmers there went on strike, blocking roads to prevent crops from moving to ports. The Argentine farmers complain that the recent high prices for their crops were being taken away by the government, while their own cost of production has continued to rise.
As a result of the Easter Holidays, much of Central and South America was closed for business last week.
According to the February export report issued by The Fertilizer Institute, Australia received the largest quantity of DAP, 84,454 mt, while India was second with 52,783 mt, and Japan third at 49,772 mt. Total DAP exports for the month were 281,900 mt, an increase of 6.6 percent over a year earlier. For the calendar-year-to-date, India has taken the most, 181,123 mt, Australia was second at 84,454 mt, and Mexico third at 76,360 mt. Exports so far this year amounted to 635,845 mt, an increase of 3.7 percent compared to the same period in 2007.
Australia was also the biggest buyer of MAP in February, taking 54,800 mt; Canada was second with 32,277 mt, with Japan the third biggest importer at 18,572 mt. For the calendar-year-to-date, Canada was on top with 66,584 mt, followed by Australia at 54,800 mt, and Colombia at 23,687 mt.
Based on the most recent sales, the DAP export price range last week was $1,050-$1,100/mt FOB, which was $100/mt FOB higher than the previous week’s $950-$1,000/mt FOB range. Expect prices to increase at $50/mt FOB increments with each successive sale.
POTASH
Eastern Cornbelt: Potash out of regional warehouses remained firm at $525-$560/st FOB, depending on grade and location, with most spot dealer quotes at the $545-$550/st FOB level last week.
Western Cornbelt: Potash remained at $525-$555/st FOB in the region for limited tons from resellers or brokers. The upper end was reported for white granular potash in Missouri. An Iowa source quoted red granular potash at the $540/st FOB mark at midweek in his location.
Southern Plains: Potash was tagged at $520-$550/st FOB regional warehouses. Mine pricing FOB Carlsbad, N.M., was referenced at $417-$425/st, depending on grade, but tons at that level have been allocated out for some time. “You can’t get any so it could be any number you want,” said one dealer.
Effective April 1, Intrepid Potash’s postings FOB Carlsbad will firm to $503/st for 60 percent granular, $514/st for 62 percent standard, $517/st for 62 percent fine standard, and $520/st for 62 percent granular muriate of potash. The company’s postings in Utah will include 60 percent granular at $503/st FOB Moab and $517/st FOB Wendover, with 60 percent standard moving to $497/st FOB Moab and $511/st FOB Wendover.
South Central: Potash remained in a broad range at $510-$550/st FOB warehouse to the dealer, with some reports of spot tons available for as low as $500/st FOB. As with phosphates, the potash warehouse figure was trailing current replacement costs. Several sources reported a $550/st FOB market for Russian potash barges at the Gulf.
Effective for the March 10 forward shipping period, Agrium’s red premium potash postings firmed to $545/st rail-DEL in Kentucky and Tennessee.
Southeast: On the potash front, sources reported a list price at $500/st or more FOB Wilmington for some brokered tons. Effective for the March 10 forward shipping period, Agrium’s red premium potash postings firmed to $545/st rail-DEL in Virginia and West Virginia, and $555/s rail-DEL is the new posted level in Alabama, Georgia, Florida, and the Carolinas.
The high costs for phosphates and potash had many dealers approaching the spring season with caution. “I hope we run out of everything before the season is out this year,” said one. “The rule has been to ‘get all you can,’ but I sure don’t want to be left with any at the end of the season.”
SULFUR
Tampa: Last week was the lull before the storm for the sulfur industry. Soon – very soon – negotiations for second-quarter contract prices will begin, and it will be interesting to see what opening numbers the sulfur industry tosses on the table for discussion. As of last week, it appeared the increase the sulfur people will be seeking will be somewhere between $100/lt and $250/lt, but regardless it will be a tough pill for the phosphate industry to swallow. Sulfur interests will be seeking to bring the Tampa price somewhere close to the world price, which was as high as $640/mt FOB.
A large hike could make it very difficult for companies like Mississippi Phosphates, which must import rock from North Africa, to remain profitable. The only thing that may help would be a sharper-than-anticipated drop in the price of ammonia for April, but that was not expected. The price of ammonia will take a bigger drop in May and June, but that may not be enough to help.
Otherwise, sulfur supplies remain critically short, and no change in that situation was likely in the near future. One possible solution would be if Mosaic was to reopen its mine, which would put more into the system and help hold down prices. However, that would take somewhere between six months to a year and cost millions of dollars. It would be a risky move, especially if the sulfur market were to begin moving downward.
MARKET NOTES
India: RCF has drawn up a very ambitious plan for setting up an ammonia-urea and phosphatic plant in Mozambique at an investment of US$1.90 billion. Present gas availability in Mozambique is 3.5 TCF, and there are prospects for further exploration. Suitable land and infrastructure such as a gas pipeline, water, and a railway corridor are available, and the gas is likely to be priced at US$2/mmbtu.
Phosphate rock is to be sourced from FOSKOR, and sulfur can be imported and transported from the Matola Port by conveyor. An investment of US$1.90 billion will be required for mining purposes and for the setting up of ammonia (2,500MTPD), urea (3,500MTPD), P205 (330,000MTPA), and granulation (650,000 MTPA) plants.
Rock mining could be undertaken by NMDC, RCF, and FOSKOR, and the ammonia-urea and Complex Fertilizer Plants could be jointly set up by RCF, NFL, the Industrial Development Corporation of South Africa, and the government of Mozambique.
RCF has now been instructed by the board to immediately issue an Expression of Interest to IDC, FOSKOR, and the Mozambique Government for setting up the project.
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.
