Demand spurs rise in fertiliser prices
AUCKLAND: Fertiliser prices — a key input cost for farmers — are on their way up.
The international price for DAP — the product that combines ammonium and phosphate — have been bouncing off a low point as major world producers slowly respond to increased demand.
‘‘It’s been low for a while and at those low prices, manufacturers around the world — the big players — probably were not making a lot of money,’’ a spokesman for fertiliser coop Ravensdown said.
‘‘So we are seeing a controlled, disciplined rise, because demand tends to go up in places like Brazil and India at this time of year,’’ he said.
The US had an unusually wet season last year, which made for poor growing conditions and lower demand.
‘‘Now that demand has picked up a bit, the big companies are not turning supply on quite as fast — especially China, which is a big player here,’’ the spokesman said.
‘‘They have the discipline to not necessarily respond instantly to that rising demand, so we have seen prices bumping up,’’ the spokesman said.
Over the month or so, DAP prices have lifted to $US350 ($NZ525) a tonne from $US300 a tonne.
Ravensdown has lifted its price to about $780 a tonne from about $750 a tonne in August.
‘‘It’s a big jump and we will be keeping a close eye on it.’’
This spring would be an important one for farmers, coming as it was on the back of a drought at the end of autumn, and against the background of favourable growing conditions.
Rural lending specialist Rabobank expects the drivers behind recent fertiliser price rises to weaken in coming months.
‘‘Subsequently, we expect prices across the global fertiliser complex will return to the lowprice environment by the beginning of 2021,’’ the bank said in a commentary.
Seasonal buying, in particular from India and Brazil, had driven the prices of both phosphate and nitrogen in recent months, it said.
While prices had risen, they remained low in historical terms, it said. — The New Zealand Herald