Farm Ireland
Independent.ie

Monday 24 April 2017

No relief in sight from soaring fertiliser prices

Fertiliser prices rises are the main factor in rising farm input costs
Fertiliser prices rises are the main factor in rising farm input costs

Fertiliser prices are set to remain at close to record highs even though manufacturers' costs continue to decline.

And fertiliser industry representatives dismissed demands by farm leaders for formal enquiries into pricing levels.

"There is nothing there to come after - send in the competition authority but they have nothing to get," Fertiliser Europe's managing director, Jacob Hansen, told the farmers at an IFA conference in Laois last week.

"The fertiliser market price is set by supply and demand," he said, before emphasising the industry's support of free trade.

Over the last year, there has been a reduction in gas prices of at least 30pc, which is the main input in the manufacture of nitrogen products.

However, strong demand this year has allowed manufacturers to charge up to 10pc more for lines like CAN.

Despite fertiliser suppliers' insistence that everything was above board, European farmers are lobbying the EU Commission's competition office to instigate a formal enquiry into the sector.

They believe that the sector needs more price transparency.

However, the biggest influence that the EU can have on fertiliser prices is likely to centre on the 6.5pc import tariff that fertiliser imports are subjected to.

Half the global total fertiliser supply is produced in five countries with China a leader in many of the fertiliser products, followed by India, Russia and Belarus.

Irish farmers spent €600m on fertiliser last year, making it the second biggest input cost on farms.

Volatility

Copa-Cogeca's Max Schulman, who represents 60 EU farm organisations and 30 co-ops said that the volatility in fertiliser prices was "killing" the sector.

"We need some way to keep our costs down and there is no real competition on prices," he said.

Mr Schulman, who grows cereals in Finland, will meet this week with the chief executive of Yara, the world's largest manufacturer of fertilizer.

Yara saw their profits rise to €2.6bn for the first quarter of the year - an increase of over €0.9bn - and their share price increased by 33pc over the past year.

The seven largest manufacturers of ammonia nitrate account for 93pc of the output in Western Europe.

The IFA's cereal chairman, Liam Dunne said that international grain prices had fallen since last year.

"This is a situation that is unsustainable," said Mr Dunne.

"Most people will have to switch off their tractors after the harvest because they will not be able to sow," he claimed.

Indo Farming