AS with many other sectors of the agricultural industry, the recent election result in the United States has brought some uncertainty to the global fertiliser market with expectations being that prices could rise, according to the recent fertiliser market outlook issued by AHDB. 

With the US result already having an impact on other commodity prices, the mood in the fertiliser market is very much ‘wait and see’ as little is known about what policies the President-elect will enforce that will impact the fertiliser market directly. 

The strengthening of the US dollar following the election is one contender, as Wall Street stocks ended up closing 1.4% higher after the result, and the dollar has since strengthened against other currencies. However, some experts have since predicted economic growth to slide downwards in the next four years. 

As well as the strength of the dollar, another factor likely to impact the fertiliser industry is the possible revival of the Keystone XL pipeline, which was blocked by the Obama administration in 2015 but Mr Trump has since made it clear in a statement released earlier this year that he would reverse the decision. This could affect the economics of sulphur production in the US, as there is a possibility that sulphur production could increase out of the US gulf due to the volume of unrefined oil that would arrive in Texas. 

Looking to fertiliser itself and the global demand for nitrogen fertilisers has remained weak in recent months, doing little to alter the over-supply of nitrogen for most of 2016.

Closer to home, demand looks strong in Europe as buyers are expected to return to buying mode this month and next. In the United Kingdom, the supply of Ammonium Nitrate (AN) is rumoured to be limited and there is talk among market leaders that the scale of this could amount to a shortfall of around 100,000 tonnes. This shortfall can be pinned to lower-than-typical import volumes from Lithuania, Poland, Belgium and Russia, and because the domestic producer – CF Industries – is reportedly sold out for January. As a likely result, the Black Sea AN benchmark rose sharply from 30p per kg N during June to 42p per kg N in October.

The phosphate market has continued to see global weakness in the absence of demand from some of the most important markets in India and the Americas. Weak import demand from elsewhere has meant that many Chinese producers have turned to focus on supplying the domestic market. 

In Europe, phosphate availability appears to be good with a steady stream arriving in the north of the region. Looking to the UK and diammonium phosphate (DAP) is arriving through December and triple superphosphate from Morocco and Israel.

The weak demand for phosphate has failed to boost prices this year, with prices now at the lowest levels since after the global financial crisis in 2008 as DAP trades at 57p per kg diphosphorus pentoxide in September.
Demand for potash has been stable in key markets such as South-east Asia and Brazil, while spot demand in Europe has been limited by the season. 

One of the key European suppliers of sulfate of potash (SOP), Belgium-based Tessenderlo, is said to have lowered its SOP operating rates because of weaker demand in Europe and possibly a production issue. Muriate of phosphate pricing has remained largly flat from July through to October, with the MOP Vancouver FOB granular benchmark resting at 32p per kg potassium oxide throughout the period. This stability in recent weeks is likely to be indicative of potash prices having reached a floor.