Ammonia prices are up, may rise higher

Global fertilizer demand tightens North American ammonia market

by Tom Stundza -- Purchasing, 8/27/2008 11:58:00 AM

Due to high global demand and tight supply for fertilizer, the August spot price average for raw material ammonia has risen worldwide. According to Purchasingdata.com ammonia prices averaged $559/net ton in August, the highest ever, but suppliers were looking for $700/ton.

Market analysts say ammonia suppliers are likely to be asking for 40% higher ammonia prices for September deliveries while buyers probably will press for lower prices, at least for the first half of the month. That’s because retail demand for fertilizer is soft as many farmers already have pre-paid for product and others are waiting for expected expanded 2009 output to generate cheaper prices going into the spring planting season.

ICISpricing.com reports that the current market outlook has been muddied by an emergency buy of 11,024 net tons from Potash Corp. of Saskatchewan by fertilizer marker Terra Industries of Edinburg, Texas after there were concerns about a strike at Potash Corp. The sale was made at $1,020/ton in August for delivery to Terra’s ammonia plant in Donaldsonville, La., in the second week September.

See also: Potash, fertilizer prices soaring

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