FERTILISER costs climbed further this week in an exceedingly tight market with rising demand, according to trader, Calum Findlay, Gleadell.
“The fertiliser market is incredibly firm, but there has to be a limit as to where it can go,” said Mr Findlay.
Urea is currently trading at £225/tonne compared to £185/tonne at the same time last year, while ammonium nitrate is now over £180/tonne, compared to around £165/tonne last autumn. At the same time, delivered phosphate is priced at around £265/tonne.
“We have also just been informed by the blenders that potash is now over the £200/tonne mark on to farm, which is a price I have never seen before.
“The problem is that the UK national fertiliser manufacturers can not supply the total market requirement in the UK, so we are therefore reliant on imports, which are not arriving because products are going elsewhere in Europe, where they can be sold at higher prices than they are in the UK.
“On top of that, with set-aside disappearing and more wheat going in the ground in the good autumn drilling conditions, we have seen a higher market requirement for fertilisers this autumn, so there is no doubt the market is being squeezed.”
Last year, the UK’s nitrogen requirement was 1.7 million tonnes and this year Mr Findlay predicts that figure could rise to 1.9 million tonnes.
He also warned livestock producers, that they could get a nasty shock when they came to source their grassland fertilisers in the spring.
“There will be a shortage of nitrogen come the spring. We are already seeing a shortage now and the grassland market for early next year hasn’t really started yet.”
As world demand for wheat rises, the UK fertiliser industry is preparing for a significant increase in demand for its products as a whole, says David Stacey, fertiliser sector chairman of the Agricultural Industries Confederation.
“Forecasts are for an increase of some 200,000 tonnes in the UK alone, which will be a welcome reversal for the fertiliser industry, after the 20 per cent decline in fertiliser consumption over the past decade,” said Mr Stacey.
That reversal reflected significant increases in commodity prices such as wheat, which had almost doubled along with rising milk prices, he said.
Rising grain prices, should sharpen the focus on nitrogen usage, according to Mark Tucker, head of agronomy, Yara UK.
“For growers to achieve optimum profitability, it’s vital they factor in these higher output values when calculating next season’s fertiliser requirements. Our research shows that higher wheat prices have resulted in a 49 per cent increase in return on investment in fertiliser, making it more important than ever to ensure correct rates are used.”
Nitrogen dose response trials conducted by the company over the last two years at three different sites across the UK have shown the doubling of wheat prices has led to an average increase in optimum nitrogen rates of 35kg N/ha, resulting in an average yield rise of 0.15t/ha.
