January 27, 2023

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fertilizer market.  More problems may arise in the spring

fertilizer market. More problems may arise in the spring

Prices are definitely higher. The price of ammonium nitrate ranges from approximately PLN 3.6. and 3.65 u. Polish zlotys per ton, as before the year 1000. zlotys. And the price of the main nitrogen component of ammonium nitrate has tripled – as Piotr Godlewski, director of the board office of the Polish Agricultural Services Association “Polsor”, admits in an interview with money.pl, among other things, fertilizer sellers.

There is no shortage of goods, but there are no takers

He also argues that, although price is subject to market mechanisms, distributors do their best to ensure that there is no shortage of goods. – It is worth noting that Distributors’ cooperation with local fertilizer producers is based on regular receipts of predetermined quantities of fertilizers. This ensures smooth production for producers, and for distributors the right amount of goods to meet the expected demand of farmers – says our interlocutor.

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In any case, the goods are currently in the sellers’ warehouses. The problem is that no one wants to buy it because of its price. At the end of November, Pyotr Godlowsky, at a meeting of the Parliamentary Committee on Agriculture and Rural Development, confirmed that “the warehouses are completely full.” At the time, he also asserted that he was hurt by the narrative that middlemen deliberately buy fertilizer to drive up their prices. He explained that they do so because they are obligated to do so under their contracts with the producers.

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It is very painful to call them distribution speculators, to tell farmers that distributors and speculators buy fertilizer and wait for a better price. Our companies have 20,000 tons of fertilizers, that is, goods worth 60 million PLN. Who can finance and take possession of the goods in the hope that the price will rise? How will you fall? Godlewski asked in the House.

The state participates in the distribution

However, as we hear in informal conversations with sellers, the farmers did not want to buy fertilizer from them, because they were waiting for them to join in selling them. A state-owned company, i.e. the National Food Group. This move was announced several times by Deputy Prime Minister and Minister of Agriculture Henryk Kowalczyk.

We asked Krajowa Grupa Spożywcza about its plans for the fertilizer market. We are still waiting for an answer.

However, the inclusion of the state-owned giant in the sale has not yet improved the price situation, Bronislaw Vogliwski, head of the Lodz Chamber of Agriculture, notes. In his letter to the President of the National Council of Chambers of Agriculture we read, among other things: that he “neither announces the support of nitrogen plants with public aid, nor the idea of ​​distributing fertilizers through the National Food Group. (KGS) does not bring, at the present time, the hope of purchasing fertilizers at prices that guarantee the profitability of productionTherefore, the Chamber calls for the introduction of an “effective system” that guarantees obtaining fertilizers at “acceptable prices”.

In mid-November, the Farmer.pl portal analyzed offers at distribution points that cooperate with KGS. As he reports, the prices “turn out to be a bit below the market average.” However, the authors stipulated that they were able to find fertilizers on the market at lower prices than those offered by sellers associated with the state-owned company.

There will be new problems next year

Farmers delaying fertilizer purchases could cause spring hiccups, both distributors and producers warn. Because if they do not supply now in part, then They will flock to shop in the spring, and this will lead to crowding and delivery problems. In response to questions from the Polish News Agency, Grupa Azoty – one of the leading producers of fertilizers – recommended that farmers “arrange their purchases over time”.

Postpone your shopping just before the start of the spring seasonWhen the backlog of orders and the associated increase in product deliveries are noted – this year in addition coal And the cereal Than to fight Ukraine – May lead to logistical bottlenecks beyond Grupa Azoty’s control, preventing timely delivery of required fertilizers – We read in the company statement sent to PAP.

Christian Rosinski, financial journalist

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