Fertiliser prices likely to be volatile

Fertiliser prices likely to be volatile

Friday, July 9, 2010

Variations in currency and exchange rates are adding to the volatility likely to affect global fertiliser prices over the coming season, says GrowHow UK's marketing manager Ken Bowler.

Mr Bowler stresses that fertiliser operates in a global market where many factors beyond our shores will affect prices and availability. Increasing affluence in other areas of the world is seeing demand for fertiliser rise to meet consumer pressure for higher quality, often meat-based, diets. This could lead to demand for nitrogen fertiliser increasing in 2011 by some 6% or more compared to 2009.

"Britain accounts for just 1% of the global market for manufactured nitrogen. We cannot manage world markets, but we need to be prepared for ongoing volatility," says Mr Bowler. "Recent weeks have seen considerable movements of exchange rates for sterling against both the Euro and the Dollar. A weak pound will put upward pressure on fertiliser prices, particularly nitrogen."

However, supply and demand still plays an important part, he adds. "In some European countries the new fertiliser season has got underway at prices that equate to around £210/t for ammonium nitrate delivered. This higher than anticipated price reflects a halving of stocks of all forms of nitrogen to around 1m tonnes as well as the supply difficulties that some plants have experienced."

Within the UK, AIC fertiliser statistics point to a recovery in fertiliser usage over the 2009/10 season as prices fell back from the peaks experienced in 2008/09 season. "However, in the face of a harsh economy and the pressure to protect the environment it is important that fertiliser usage is based on the sound principles of using the right product, at the right rate, at the right time," advises Mr Bowler.

Independent research shows that getting any of these wrong comes with the potential for severe penalties. The average loss from inadequate sulphur nutrition can be up to £74/ha; the incorrect N rate can mean losses of £43/ha; using urea instead of ammonium nitrate can mean losses of £31/ha and incorrect timing can cost £28/ha in lost output.

"GrowHow has the solutions to these significant losses. Nitram provides nitrogen in a dependable form, with minimum losses to the environment; Double Top provides both nitrogen and sulphur which is increasingly necessary to unlock a crop's full yield potential; while N Min and N Calc will accurately assess specific field rates and timings."

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