January 9, 2012
World farmers wait before buying fertiliser for new year
Farmers are waiting to observe international fertiliser price trends before hurrying to buy their 2012 supplies.
Chris Hayes, IFA inputs project team leader, has advised that retail fertiliser prices are coming under pressure as international wholesale prices continue to fall.
The West Cork farmer said that granular urea prices at the year-end had fallen by EUR125 (US$159) per tonne since October 2011. He said this trend has been partially reflected in prices quoted to farmers, which have fallen below EUR425 (US$541). IFA predicts that prices for urea could fall below EUR400 (US$509) in the coming weeks for volume orders.
IFA is also reporting slight weakening in prices for calcium ammonium nitrate, and advising that farmers can buy this for EUR315 (US$405) and under.
"Once again, the expectation is for [the nitrate] to fall under the EUR300 (US$382)/tonne mark," said Hayes."Farmers should remain vigilant and not rush into buying volumes, as prices have the scope to fall further."
Despite the positive longer-term outlook for global agriculture, the eurozone crisis has caused a sell-off in most fertiliser prices in recent months.
The price of urea, a nitrogen-based fertiliser, fell 26% in the fourth quarter, while diammon-ium phosphate fell 21%, according to sources at Rabobank, the Dutch-based financial services provider, which specialises in the food and agri-business sector. They said prices for potash, a potassium fertiliser, bucked the trend, rising 4%.
Mosaic, one of the world''s largest fertiliser producers, has issued a cautious outlook for the markets in the near term, but was confident strong agricultural markets would rekindle demand later in 2012. Both Phosagro in Russia and Mosaic have announced phosphate production cuts in response to falling prices.
However, the International Fertiliser Industry Association predicts that global fertiliser consumption will hit a record this year due to high agricultural commodity prices driving farmers to invest in their crops. It predicts usage of 178.3 million tonnes in the 2011-2012 crop year, up 3%.
Also pushing fertiliser demand is increasing pressure on land resources due to rising demand for food, especially from developing countries.