well worth a read IMO... reading between the lines there seems...

well worth a read IMO... reading between the lines there seems to be a bit of concern over there with supply this year. maybe looking to lock in a reasonable price from a fledgling producer early?

9 February 2010
Fertiliser price pressures building

With the global financial crisis now settling into a slow recovery, international pressures are
returning to fertiliser pricing.
Ballance Agri-Nutrients Chief Executive Larry Bilodeau explains that during the past year prices
have been near or below cost for some manufacturers. He says these unsustainable prices,
combined with an inventory pipeline that has been empty for some time now, has lead to
upward price pressure.
Making longer-term pricing forecasts is still problematical, but all the indicators show that
pressure is starting to mount on international prices for fertiliser products, says Mr Bilodeau.
We were able to seize on a weakness in international prices for phosphate rock to offer our
customers a 20 percent price reduction in our main superphosphate products in December, but
it could prove to be short-lived.
In the past two months, international DAP and urea prices have risen significantly, with DAP
skyrocketing as much as 45 percent. Sulphur, an ingredient in superphosphate, is also heading
for uncertain territory.
Much of the pressure on prices is coming from companies around the world replenishing their
inventory pipelines, which they have deliberately allowed to run low over the past 18 months.
The Northern Hemisphere crop-planting season will begin soon, and there is a rush to replenish
the supply chain in time.
The market is driven by demand, and at present is already ahead of forecasts for mid 2010 for
many fertiliser commodities. The expectation for most fertiliser products is upwards but to
where?
Mr Bilodeau says that although he cant predict precise price movements, he is confident prices
wont reach the lofty heights experienced at the end of 2008, and anticipates that they will start
to settle or possibly come down once inventory pipelines are filled and the Northern Hemisphere
spring season is over.
Before the global crash, fertiliser prices were on a steady climb because of the demand for more
and better quality food to feed a growing world population. This required a commensurate
growth in fertiliser use.
With demand for plant nutrients returning to near normal levels, he says that the main importers
of urea India, USA, European Union, Thailand, Brazil, Mexico and Australia - are all forecast
to return to at least the levels taken before the financial crisis.

World demand for the major phosphate and potash products is also forecast to advance sharply
in 2010.
Despite rising prices Mr Bilodeau is convinced that the fundamentals are still strong for farming,
as commodity prices go hand-in-hand with fertiliser costs.
He says that New Zealands role in food production is vital.
I am optimistic about the long-term future of New Zealand farming and fertiliser use. The
worlds food bank requires replenishment each year, exacerbated by continuing growth in the
large developing countries of Asia, and a growing and more affluent population.
Our food producers are well placed to respond quickly to these growing needs.