Sunday 5 July, 2009

News

Email NewslettersYou are in: Home > Business

Browse news by type:

All Livestock Arable Dairy Poultry Machinery Business Local

Fertiliser prices continue to climb
08/04/2008 11:28:00
FWi

Ever-increasing fertiliser prices bring with them almost a sense of inevitability coupled with a feeling that somehow it will never end.

Today we have nitrogen in excess of £300/t and phosphate over £500/t.

Certainly neither economists nor manufacturers ever predicted fertiliser costs this high, and whilst there is still comfort to be had in the fact that the nitrogen price is following a cyclical pattern, the continually rising cost of other raw materials is cause for real concern.

After all, the raw material for nitrogen fertiliser, nitrogen itself, is free and constantly cycled.

Extracting nutrients for recycling

The capital costs of factories and the variable cost of energy are the factors that determine its price and in the long term there will be alternatives to gas and oil.

Unfortunately, supplies of P and K are finite and before very long agriculture will need to look very carefully at ways of extracting these nutrients for recycling.

Meanwhile, P and K prices continue to rise. Muriate of potash is now around £390/t and wholesale costs of diammonium phosphate at $1150 place it in excess of £500/t on farm.

Isolated from prices

Ammonium nitrate is now £307/t retail for April and May, pushed upwards by global urea prices which are now rising again following a brief drop.

Prices should drop again in June as the price rebate is applied for early buyers.

Fortunately, the British farmer has to a significant extent been isolated from today’s prices because of the well established pattern of early buying.

Prices forcing change

Indeed the market is estimated to be some 500,000 tonnes ahead of last March, partly because of increased nitrogen demand and partly because of forward deliveries.

There is no doubt that current pricing is forcing agronomic change, but in Ireland it is also forcing commercial change as the market becomes closer to the British model of steady purchase throughout the year.

Once a market dominated by NPK fertiliser, the combination of legislation concerning phosphate use and the high cost of P and K has changed demand in Ireland mainly towards nitrogen.

No over-supply in Ireland

With the urea market over, focus is upon calcium ammonium nitrogen (26%N) at £270+ in the north or €361/t in the Republic.

This would equate to £358/t for AN in Britain, illustrating that the Irish farmer must pay a high price for a specialist product.

But the market pattern is at last changing in Ireland. The market is no longer over-supplied by a state subsidised home manufacturer and “trust price” has been removed from trading.

'Major shock'

There is no benefit in leaving purchase to the last minute and the price quoted is the price paid.

Already many farmers are starting to buy earlier and no doubt high prices will drive further change.

But, still the majority will have a major shock when they come to their late April purchases.

Great Britain

Straight

Domestic N
(34.5%N) SP5

Imported AN
eg Lithuanian

Imported urea

Liquid UAN
37kg N/100litre

(28.8 %N/t)

around £307

April/May

Limited imports

£290

Market quiet

no prices

TSP (47%P₂O₅)	£500+ tight availability
Muriate of Potash (60%K₂O)	£390

Compound
N.P.K	Complex	Blended
25.5.5	£313	From £300
15.15.20	£460 if available	Varied availability
20.10.10 / 27.5.5	£355 if offered	From £340
17.17.17	£466 if available	??
Aftercuts (NK)		No market
23.4.13.7 Sulphur	£340

Autumn grades (PK)		From £310

Trace elements

Copper, zinc, selenium,
cobalt Iodine and sodium
£11.80/acre pack

Ireland

	Urea		CAN	25.0.13 aftercut*	27.0.6	27.6.6 complex**
Northern Ireland	No market	£272		£310+	£330	No longer used Phosphate regulations
Republic of Ireland†			€361	€395	€390	No Market.

†Note in the Republic of Ireland nutrients are expressed as elements not oxides. Analyses will not be directly comparable with those used in the UK.
*Known as 24.2½.10 blend in the Republic of Ireland
**Known as 27.2½.5 in ROI

Note All illustrated prices are based upon 24 tonne loads for immediate payment. Prices for smaller loads and those with credit terms will vary considerably.

Source: Bridgewater