By Robert Harris
NEW-SEASON fertiliser prices are set to be the lowest for almost a decade, and threaten to reduce profits for manufacturers.
The big three UK makers are trying to set July deliveries at £98/ t. But such prices are already meeting resistance among farmers, who view the current price of £90/ t for 34.5%N as a benchmark.
Aggressive pricing by merchants determined to hold on to market share at greatly reduced margins has stimulated demand, it seems.
“We are refusing to supply some of the orders at prices they are quoting,” says Hydros Robin Shackleton. “We have heard of deals being done at £90 on-farm with payment due in December.”
New player Terra has already done almost 10% of next seasons fertiliser business, some on trust deals. Nitram has been selling for a top price of £92/ t on farm, with Sulphur Gold carrying a £2-£3/ t premium.
“It is certainly the best buy that farmers have had for a number of years,” says Terras Andy Yates. “Last year straight N was over £100/ t, although that eventually pegged back to £98.”
Fertiliser broker Mike Stickland reckons makers will be hard pushed to raise prices.
“I would say there is no chance of getting £98/ t. They may talk of £90-92 now, but big tonnages, paid September, are available for about £87/ t in the east and south east.”