Soaring fertiliser prices bring calls for EU talks
FARMERS leaders, incensed at the recent decision by Brussels to slap anti-dumping duties on imported fertiliser while domestic product prices are rocketing, are seeking urgent meetings with officials to tackle the problem.
Additional import duties on Polish and Ukrainian nitrogen recently agreed by the commission range from k23-33/t. In theory, that could add an extra 14.50-21/t to prices, although some is likely to be absorbed by the trade.
Growers will find it much harder to find cheaper alternatives to costly UK product, and the ruling will support price rises already in the pipeline, says NFU deputy president, Tim Bennett.
“In the past six months, growers have seen prices of ammonium nitrate rise 35-40%. They simply cant afford to pay any more.”
Prices for UK product have hit 114/t and makers want at least 130/t by the spring. A pricing structure is in place to achieve this.
But cereal producers net margins are expected to fall below 20/ha (8/acre) this year and higher prices will have a big impact on margins, says Mr Bennett.
The NFU has written to the commission requesting an urgent meeting. It is also seeking the support of the Department of Trade and Industry to help reverse the ruling when farm council reviews it in Brussels early next year. If it fails, import duties could be extended for five years.
David Heather, director general of the Fertiliser Manufacturers Association, a member of the European FMA, which pushed for import duties, says the move is not necessarily bad news for farmers.
“The key thing is it will help bring some stability back into the market. Price rises over recent months only reflect increased input costs,” he says.
Product prices must reflect costs and the imposition of import duties will help, says Mr Heather. Manufacturers in eastern Europe pay much less for inputs like gas “if they pay at all” and work practices are often poor.
Roger Chesher, of independent consultant Bridgewater Partnership, warns that prices could rise even more sharply in the spring as makers renegotiate natural gas contracts later this autumn.
Prices have almost doubled in the past year. “There could be a big hike, provided manufacturers are not sitting on too much stock. But I do not think they will want to push prices up to 140/t.”