Red diesel prices climb after Trump renews Gulf hostilities
© Abedin Taherkenareh/EPA/Shutterstock Fresh hostilities in the Gulf have sent crude oil prices back up to four-week highs, with the number of tankers passing through the Strait of Hormuz reportedly falling to two-month lows.
As of Wednesday (15 July), West Texas Intermediate (WTI) crude oil had breached $80/barrel, up from below $72 on 11 July.
See also: Find all our market reports and prices in one place
Red diesel values consequently increased from a UK average of 81.48p/litre to 91.57p/litre in the week to 15 July, and the longer-term implications for fertiliser and other inputs could be significant.
With both the cost of shipping soaring, and the volume of supplies curtailed, availability of key inputs could tighten later this year.
In the short term, however, fertiliser availability is sufficient and prices have been drifting over the past couple of months, said Jess Corsair, senior economist at the AHDB.
Ammonium nitrate eased by £16/t in the week to 3 July, to average £457/t – still some £53/t up on pre-conflict values.
Granular urea lost £22/t to £482/t (but still £27/t up on pre-conflict levels), while triple super phosphate eased by £3/t week-on-week, to £619/t (£93/t above pre-conflict values).
“There hasn’t been a lot going on in the [physical] market – farmers are holding out on buying for the new season, to see if prices will fall further,” she explained.
“We’re not seeing major issues with availability. Since issues in the Gulf escalated again it has impacted crude oil prices, but we’re not seeing that come through to fertiliser at the moment.”
French support scheme
Demand for fertiliser in France increased sharply following its government’s recent announcement of a €50-€70/t (£43-£60/t) subsidy on straight nitrogen fertiliser bought before the end of September.
According to a report in Argus Media, urea prices jumped from about €460/t (£392/t) ex-store to €495/t (£422/t) following the announcement, with strong demand for sulphur-enriched granular urea and UAN30.
However, the subsidy could divert demand from NPK fertiliser and ammonium sulphate, said the report.
