07 February 2012 10:41 [Source: ICIS news]
By Karen Thomas
In addition, the fundamentals have remained steady-to-firm with increased confidence that grain and corn prices in the
Ammonia prices remained strong until December, at an average of $576/tonne FOB
The absence of business in the northern hemisphere during the fourth quarter and the depressed financial outlook undermined fertilizer export prices, which are still vulnerable as the first quarter gets underway.
Adjusting for the ongoing shortfall of Libyan urea due to the country still struggling with post-conflict resolution after last year’s civil war, Yara’s fertilizer deliveries were down 10% compared to the fourth quarter of 2010.
Noting the delayed demand in Europe and the
"Northern hemisphere fertilizer customers have been reluctant to take positions ahead of spring application, resulting in slow fourth-quarter sales overall,” he said.
“However, crop prices and farm margins remain healthy, and fertilizer deliveries will need to recover to avoid a decline in global grain stocks.”
The sovereign debt crises in
End-users in the
On the phosphates market, export prices from the
The move did prompt a buying flurry of diammonium phosphate (DAP) and urea during the first week of January and prices stabilised.
Nevertheless, Yara’s drop in fourth-quarter deliveries highlights the impact of rising fertilizer prices, weaker agricultural commodity prices and ongoing global financial concerns.
In western Europe, deliveries were down 21% on the same period in 2010 and imports were down 36%.
Urea and DAP buying so far in the first quarter has not fully reduced this 36% deficit and, until the recent cold snap, the market was confident that further imports would be needed for arrival in early February.
But export prices could, again, be at risk if farmers delay the first nitrogen application that was due mid-February due to the plummeting temperatures that have hit the larger European markets, including the UK, Germany and Italy.
In addition to the prospect of another hiatus in demand for imports, traders and buyers face delays to importing and distributing cargoes if the disruptions to ports and land transport links caused by the severe weather continue.
Looking forward, Yara also points to this increased activity and, coupled with healthy farm margins, expects normal spring nitrogen consumption to resume in the northern hemisphere.
Although the company noted that nitrogen industry deliveries for 2011- 2012 could finish lower than the previous season, it is still targeting a stable European market nitrate share compared with the year before.
Yara also holds to the expectation that most agricultural markets will continue to support increased use of fertilizers and market sentiment is buoyed by the prospect that demand will return in strength as the
The company’s sales outside Europe were down 9% on the fourth-quarter of 2010 and although demand for premium products was strong, droughts in
Higher sales in other markets did not offset the low demand in Latin American and the volumes of urea deals were down, particularly in
Domestic demand in the
($1 = NKr5.82)
($1 = €0.76)
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