NEW season nitrogen prices have slipped 'for the early bird to catch the worm', with latest values currently down from highs of more than £250 per tonne at the beginning of the year to nearer £180/t.

Compound fertilisers are, though, only back £12-£18 in the same period, according to Jim McMullan, of Galloway and Macleod, who said prices ranged between £35-£70 per tonne more expensive than straight nitrogen.

He added that straight nitrogen values are traditionally low at this time of the year to encourage buyers when demand is low, and conversely increases in the spring for the 12-week usage period in spring/early summer. 

Mr McMullan also warned that with the UK fertiliser market circa 1% of the global nitrogen market, prices tend to be volatile with the 2016/17 season having been particularly affected. 

The Brexit vote on June 24, 2016, saw sterling fall as much as 14% against the euro and dollar which, in turn, increased prices on all imported goods. 

Urea prices have already been affected by producers in China, where because of low prices, energy costs and environmental pressures, saw reduced operating rates with the result Chinese exports of urea were down 5m tonne in 2016. 

The anticipated new plant commissioning in 2016 then delayed further supply/demand pressure. Yet, none of these pressures – which since resulted in an increase to the global N price index of more 40% – were forecast. 

Looking forward at forecast supply/demand balances, Mr McMullan said globally, values are at the bottom of the price cycle after declines since 2011, with prices expected to rise in the short/medium term. 

Add to that a further declines in production in China and increased demand for nitrogen, particularly urea, and prices can only increase from what they are at present. 

The other problem the industry has in this country is a continuing weak currency which is expected to continue, making the UK a less attractive market for imported products. 

However, on a more positive note, the reduced value of sterling has clearly helped UK wheat values. November UK wheat futures around 17% ahead of year ago levels (spot price up 40%), US spot wheat back 5% on May 16. 

Further south, Graeme Logan, of Glasson Fertilisers, in Lancs, said straight 34.5% nitrogen is trading at £185 per tonne which is £40-£50 down on April, but still £10 up on this time last year. Values for new season urea stand at £215 per tonne, compared to £235 in April.