The Year of Nitrogen
2021 is shaping up as the biggest nitrogen year probably on record, as WA stares down the barrel of a potentially record-breaking crop.
The early and plentiful opening rains have witnessed growers purchasing urea at a rapid rate with CBH Fertiliser selling 30 per cent more urea than any previous year.
To keep up with this demand, The CBH Group is progressing a project to develop a new bulk granular and Urea Ammonium Nitrate (UAN) fertiliser storage facility next to the Kwinana Grain Terminal.
The project is currently in the planning and approvals stage, and if all approvals are met, the Kwinana Fertiliser project will improve the consistency of supply in WA, enabling growers to access more product when they need it most.
- Global markets have firmed significantly the past 4 weeks as raw material costs, ocean freight and general demand all rise on high crop prices
- Bangladesh, India, Vietnam, Thailand and Brazil are all in regular buying patterns while some major producers look at closing production for maintenance
- The US market is firm as supplies are tight and the impending import season looms with tariffs still in place against Russia and Morocco
- China threatens to impose an export tax of Fertiliser products to protect local farmers against rising global prices
- The next 3-6 months looks very supportive of global prices and currently 60% higher than the same time last year
- Expect local AUD prices to push north of $950 per tonne in June/July with no relief in sight
- India has held 2 recent tenders and both times only purchased around 550,000mt against demand of over 1 million tonnes each tender
- This ongoing demand and reluctance from major exporter China to supply has forced global prices up USD100/mt in 6 weeks
- Adding to this has been ocean freight prices remaining firm and reluctance of some ship owners to visit India due to inflated COVID-19 cases
- Australia and Brazil continue to import prompt tonnes to satisfy grower demand for winter crops and chase the higher forward prices on offer for grain
- Expect local AUD prices to remain elevated above $730 per tonne for June/July and August
- Large potash producer Belarus Potash Company (BPC) is under investigation by the EU and may have sanctions placed on exports
- Global prices have rocketed into Brazil and South East Asia the past 2 weeks whilst global demand continues across many countries
- BHP pushes closer to an expected positive decision on the Jansen mine in Canada which would add 4.5 million tonnes per year to the global market
- All imported potash to Australia faces expensive long haul ocean freight from Germany, Lithuania, Canada and Jordan
- Expect local AUD prices to move towards $600 per tonnes during July/August and rise further late 2021
Hear from grower John Young who farms 6,000 hectares between Calingari and Bolgart, about why he moved across to CBH Fertiliser.
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