Market Update
After a wet start to the summer it’s dried up a little over the last month so hopefully this has given you a chance to catch up on some jobs, possibly have a quick getaway and start preparing for sowing. Some of you have started sowing already and some of our Victorian customers received some welcome rain over Easter to set up the start to the season. Others are still waiting for a top up rain so let’s hope that comes over the next few weeks.
Most of you have received your sowing product on farm or are in the process of getting this on farm. For any of those late stragglers can I please suggest you put your sowing order in this week to ensure we have you sorted for sowing.
Chemical Supply
Locally the chemical market is in good supply so no major shortages this season just yet. Overseas the market is well stocked and most suppliers in China have increased capacity post-COVID so we’ve seen prices decrease from last year to this year with excess supply and similar demand.
Post emergent and fungicide pricing is following a similar path – a lot lower than last year and for some actives like Clethodim you’ll see the lowest pricing ever. This is great news for input budgets and plays a small role in improving profitability. Please discuss the price decreases with your agronomist to see if this changes their recommendations and/or rates for post emergent and fungicide season.
For the main items like glyphosate and paraquat we’ve seen the prices be stable or slightly dropping the last few months. Over the Easter weekend we have seen South America come back in for glyphosate orders which has seen the price do a small bounce upwards, the first increase in months. South America is planning to put import duty on Chinese made Electric cars from July 1st and as a result the Chinese electric car makers are making full use of this window to ship large volumes of cars to South America to beat the price rise. In electric car batteries, Phosphorus is used as a raw material which means Yellow Phosphorus, an ingredient used in glyphosate, has stabilised and in some cases increased. South American glyphosate buyers have been waiting for the price to come further down, however the increase in outgoing freight has also pushed the price of sea freight up. On one hand their stock is almost consumed, and on the other hand they see the sea freight is increasing rapidly so they have decided to buy Glyphosate now.
Last year the best time to purchase glyphosate was June so it will be interesting to see if that’s the case again this year. It is too early to tell what will happen over the next few months. Either way it’s a good reminder that glyphosate 450 buying in the $4s is traditionally very good value.
Fertiliser
With phosphate purchases for the season all but complete, our attention turns to nitrogen.
Urea
Currently the global urea market faces its most significant test with the India urea purchase tender being finalised.
We have seen FOB prices declining in anticipation of lower offers from producers with approx. 800,000 tonnes purchased. As with any tender we must await the final details, but for those anticipating declining prices, the final outcome certainly seems to support that perspective.
The anticipated return of China Urea exports in May also supports this perspective. Recent reports suggest that the Chinese government is easing export restrictions on urea, this could significantly impact the global urea market, as China typically accounts for over 5 million metric tons of exports annually, or roughly 10% of the global export volume. However, the timing of their return, expected in early May, coincides with the period of lowest global demand, creating a bearish outlook.
In an unexpected development, Brazilian-based nitrogen producer Unigel has announced a cessation of production at two if its facilities, which together produce approximately 1.1 million metric tons of urea annually. The decision is attributed to high natural gas costs, making production unprofitable. While this may not significantly impact the global scale, it represents a significant shift in the Brazil market, compelling local buyers to seek alternative sources to meet their demand.
Locally, significant tonnes were purchased back in January for early collection in the low $600’s which has proven to be an excellent decision. Our view remains that there is no rush to purchase further out for later (July – September) top-dress requirements. However with forecast rain for large parts of the East Coast, any requirements for May and early June need to be acted on sooner rather than later as supply will get tight.
Phosphates
Internationally it appears that Chinese exports are poised to resume in early May so there won’t be a rush among buyers in the global market. There are numerous indications suggesting that phosphate prices are either beginning or continuing to decline albeit too late for Southern markets in Australia.
With our winter crop purchases all but done our major focus is getting tonnes collected and on-farm. All ports from Brisbane to Adelaide are congested with significant delays for vessels to get on the berth & unload. Please be proactive and collect as early as possible to avoid long waits at the terminals.
We wish you all the best in the lead in to sowing and we hope you can get everything organised in time. If we can help you out with anything delivered on farm for sowing or even top ups during the sowing window please contact one of the team as we are here to keep our customers moving.
For any more detailed information from anything above please contact your local Crop Smart rep for the latest information on availability and pricing directions.
