Lower grain prices weaken Polish fertilizer makers, Erste

03 October 2013 16:36  [Source: ICIS news]

LONDON (ICIS)--World grain market developments bode negatively for Polish fertilizer producers with a price squeeze hitting farmers’ purchasing power, Erste Group Bank said on Thursday.

“The most hurt should be price-sensitive multi-component fertilizer companies,” the bank said in a note to investors, picking out Zaklady Chemiczne Police (ZChP) as one of the more exposed producers.

With major grain prices having remained on a downward trend throughout September, ZChP's parent company – second largest European fertilizer maker Grupa Azoty – would also be hit by reduced demand for fertilizers, Erste said.

However, it added that “Grupa Azoty, as a whole, should be somewhat hedged, as demand for urea and other ammonia fertilizers remained robust, although margins are somewhat lower”.

September also saw margins for two other major products of Grupa Azoty – caprolactam (capro) and melamine – remain low, but stable, noted Erste.

The Grupa Azoty group includes subsidiary Zaklady Azotowe Pulawy (ZAP), Poland's largest nitrogen fertilizer producer and the world's third largest melamine manufacturer.

By: Will Conroy
+44 20 8652 3214

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