UK farmers are calling time on the slump in the fertilizer market, and renewing purchases in anticipation of price rises, Carr's Milling Industries has said.

The UK flour-to-feeds group said that it was "increasingly confident" that its fertilizer division would manage a "respectable" annual profit after a market revival over the last month.

"As the price of fertilizer raw materials increased… farmers sought to avoid the effect of further increases," the group said in a statement ahead of its annual meeting.

So-called environmentally-protective fertilizers, which minimise leaching into groundwater, had proved particularly popular, achieving revenues "well ahead of last year".

Milling squeezed

The return to the black would represent a further rapid turn in the performance of Carr's fertilizer division, which swung from a major prop to profitability in the year to August 2008 to a loss-maker a year later, dented by the worldwide downturn in farm demand for nutrients.

However, Carr's said that the improvement in its nutrient division had been offset by weakness in its flour business, where "margins continue to be under pressure in a very competitive market".

Overall, the group said it expected an "improved result" for the year to August 29.

Investec analyst Nicola Malland said she was leaving her annual pre-tax profit forecast for Carr's unchanged at £8.1m, while tweaking divisional forecasts.

"The important months for fertiliser remain March and April," she added.

Carr's shares closed unchanged at 425p in London.