Farmers attending this week’s Cereals event have criticised the decision by a leading fertiliser manufacturer to limit the amount of fertiliser available this summer.

GrowHow UK recently announced that it would limit supply through to the end of the year to avoid last season’s situation where demand outstripped supply and many orders could not be delivered on time, the firm’s Ken Bowler said. “This year we’ve again got a lot more people wanting fertiliser earlier than we can deliver, so we’ve tried to create a structure between those who want to buy early or late.”

Prices started the season at £325/t and rose to £348/t in December, but growers unable to secure their full requirement early in this season would be forced to pay higher prices for later delivery. “We have flattened the price increments, but we need at least a £2 a month increment to cover interest costs and the value of the product.

“We’re the only manufacturer in Europe offering forward prices through to December, which does give farmers more certainty when planning, but we’re getting criticised for it,” he said.

“We recognise that GrowHow has one plant in the UK, which has finite capacity, so there has to be some phasing of how that’s delivered,” NFU combinable crops board chairman Ian Backhouse said. “But we have to be sure it is true market forces that are driving prices and not anyone taking advantage of a monopolistic position.”

GrowHow produces and sells 1.6m tonnes out of a total 3.7m-tonne UK fertiliser market. “Because we’re the market leader on nitrogen, we tend to set the way forward for strategy and price structure,” Mr Bowler said.

The recent hikes in all fertiliser prices again highlighted the need to remove the E47/t anti-dumping tax that prevented cheaper Chinese and Russian fertiliser entering Europe, the NFU’s inputs adviser Hannah Moule said. “Gas prices here are 10 times higher than in Russia, so they can produce fertiliser much cheaper. The anti-dumping tax was set up to avoid disadvantaging European manufacturers, but it is growers that are being disadvantaged.

“While the generic restriction is likely to remain, it has just been announced that three manufacturers will be allowed to supply Europe, which should help. The quantities involved aren’t huge, so is unlikely to
have a significant impact on prices.”

Catch up on all the other news from Cereals 2008