Ag-chem prices will rise, warns buyer group

Ag-chem prices are set to rise due to sterling’s continuing weakness on global currency markets, one of the country’s largest farmer-owned buying groups has warned.

Recommended prices released by manufacturers suggest farmers should budget for inflationary rises in crop protection costs during 2010, said the AtlasFram Group. With few active ingredients now produced in the UK, finished product prices are at the mercy of global currency rates, it warned.

“Because the pound has not strengthened in value against the euro to the level which some might have hoped for, prices of products manufactured in Europe can be expected to increase by at least the rate of inflation,” said John Humphreys, AtlasFram arable products manager.

“Compounding the effects of exchange rates fluctuations are a range of other global factors. The main one is China’s economy, which is expanding at record levels of 7% to 10% annually, creating greater demand from within the country and pushing up the prices of some active ingredients.”

A key issue for farmers would be timing purchases of crop protection products to obtain the best value, said Mr Humphreys. Glyphosate prices, for example, had probably reached a low and were expected to increase during 2010.

Cereal fungicides also faced upward pressure, although competition and full availability compared with 2009 should help minimise any price rises. But some mildewicides were not in plentiful supply, which meant that specific products might increase in price by more than others.

“The bottom line is that increased rape and wheat plantings this season will mean that demand for crop protection products will generally be higher than in 2009. It is therefore essential that farmers and their agronomists plan likely requirements and commit to at least a proportion of products as early as possible.”