US ammonia use to rebound in spring - Agrium

20 November 2008 14:47  [Source: ICIS news]

By Stephen Burns

HOUSTON (ICIS news)--The reduced application of ammonia and other fertilizers by North American farmers in the northern hemisphere's current autumn season would be offset by increased use in the spring, Agrium's chief financial officer Bruce Waterman said on Thursday.

But the increased demand early next year might create some logistical challenges for the supply chain, Waterman said in a broadcast presentation to investors.

"If you go by history, when you have a poor fall (autumn) you have a good spring," Waterman said.

Slow progress in the US corn harvest due to earlier wet weather has reduced ammonia application, as has sentiment that prices would fall further.

Market sources have estimated the fall application might be as much as 50% below last year in some areas.

Waterman did not give any estimate by the Canadian-based fertilizer firm of how much the application might be down.

He likened the falling fertilizer market to declining share prices, saying that farmers were looking at sagging global prices and waiting to see a bottom before they would buy.

"Farmers are deferring, hoping the price is going to go down," he said.

But if not in the current season, the farmers would eventually invest in crop nutrients, he said.

"They will put fertilizer on," Waterman said.

The US benchmark Tampa ammonia contract settled at $350/tonne for November, down from $931/tonne in October, according to global chemical market intelligence service ICIS pricing.

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By: Stephen Burns
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