03 August 2012 15:27 [Source: ICIS news]
LONDON (ICIS)--Zaklady Azotowe Pulawy (ZAP) expects demand for fertilizers to swell in the wake of drought conditions that have this year hit grain crops in the US, Ukraine, Russia and Kazakhstan, Poland's largest producer of nitrogen fertilizers said on Friday.
The desire of grain farmers to rebuild stocks following the catastrophic weather, as well as high grain prices caused by the devastating impact of the exceptionally dry conditions on many crops, should drive extra demand for fertilizers, it added.
ZAP's domestic fertilizer sales in the near future might also benefit from unusual weather, with exceptional cold seen in the late winter having reduced Poland's 2012 cereal harvest by 15% year on year, ZAP said in its latest fertilizer outlook.
ZAP is being lined up by Poland's treasury ministry for a merger with fellow state-controlled fertilizer and chemical group Zaklady Azoty Tarnow (ZAT) in a move that state officials believe will create Europe's second largest fertilizer producer.
Combined, the companies would by far make up Poland's largest industrial consumer of natural gas, with an annual consumption of more than three million cubic metres per year.
The merged entity would attempt to use its new purchasing power to secure lower gas prices that would subsequently make its fertilizer product pricing more competitive, ZAT said
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