Fertiliser Prices

Fertiliser Update June 2017

IFA Inputs Project Team Leader John Coughlan has called on the trade to immediately pass through the significant drop in wholesale fertiliser prices to farmers.

Coughlan said, “International wholesale CAN prices have fallen by €30 to €35/t over recent weeks. However, many farmers are not seeing this as importers and many of the larger merchants attempt to maintain prices at artificially inflated levels in an effort to boost profit margins.”

“Demand for fertiliser has increased significantly as the silage season gets into full swing. Keenest quotes for bagged CAN this week are ranging from €215/t to €218/t delivered. Pasture Sward / 27-2.5-5 and Cut Sward / 24-2.5-10 prices have also moved lower with keenest quotes at €318/t for Pasture and €8/t – €10/t over for Cuts. Buyer groups and individuals purchasing significant volumes are achieving further discounts on these prices.”

“No farmer should order a load without first enquiring about the price. It is evident from recent survey results that some farmers are being charged up to €30/t extra where they don’t bargain for a price before placing the order.”

Fertilser Market Update 16th January 2016

Manufacturers and suppliers have attempted to push through further fertiliser price increases in recent days. However, competition for good business particularly for large orders from individuals and buyer groups has limited the price lift in the near term.

Many co-ops and merchants moved early to secure stocks at lower prices enabling them to cut good deals with farmers over recent days.
September / October quotes for new season CAN (bagged, delivered farm) saw prices range from €175/t to €180/t, with best quotes up until the close of business last week at €205/t (up €5/t on earlier week quotes).

Urea prices have been slower to move with early season quotes at €270/t (bagged, delivered). Keenest quotes up until the close of business last week were from €278/t to €290/t (bagged, delivered). Prices for NPK compounds such as 18-6-12 and 27-2.5-5 commenced the season at €275/t to €280/t moving to €305/t to €310/t this week, with Cut Sward / 24-2.5-10 trading €10/t over.

European outlook

A number of leading European nitrogen fertiliser manufacturers are attempting to push through further price increases after a series of hikes since the beginning of the new fertiliser year last July. Lack of competition in Europe’s highly protected fertiliser market enables leading manufacturers to manipulate prices particularly for CAN and ammonium nitrate (AN) regardless of the price movement of the main raw materials.

EU wholesale gas prices which account for 70% to 80% of the cost of production of AN and CAN have fallen by 61% since 2013, rising marginally over the last 3 months. Despite this, leading European N manufacturers have pushed through a series of increases for CAN and AN, the main N fertiliser products used by EU farmers.

Despite rapidly falling international prices for AN over the last year (a benchmark for CAN prices) EU manufacturers successfully limited the price fall in the internal EU market and have led the way on increasing prices in recent months.

The protection afforded to EU N manufacturers through the imposition of anti-dumping duties and customs tariffs by the European Commission will see EU farmers pay a premium of €50/t to €60/t for AN and CAN. In addition, tightly managed supply control by major players in the industry allows to control prices not seen in other markets. Often times excess product is off loaded onto the international market at a significant discount (up to 50%) so as not to distort prices on the internal EU market.

Fertiliser Price Survey 31st August 2016

Quotes for new season fertiliser stock have bottomed out in recent weeks with top-lift CAN on offer for under €190/t for full loads for September / October delivery with October / November payment. Sul-CAN is achieving a premium of €5/t to €7/t over CAN depending on whether it is a blend or CCF. NPK compounds have also broken below the €300/t price mark with Pasture Sward / 27-2.5-5 on offer for less than €290/t and Cut Sward / 24-2.5-10 €8/t to €10/t over. Buyer groups and volume purchasers are achieving discounts on these prices.

Excess nitrogen manufacturing capacity is expected to keep a lid on nitrate prices in the near term. However, EU CAN manufacturers are in a stronger position as they have a captive audience and can control supplies and price very effectively. This is evidenced by the growing price premium for CAN over urea (a globally product) in recent years.

International wholesale prices have remained unchanged for the last number of months when traditionally manufacturers would have tried to push through monthly price increases. To-date they have not succeeded in doing so. Unfortunately, Irish farmers are paying a premium of €15/t to €20/t over many of their northern European counterparts where CAN is being quoted at €175/t.

Fertiliser Price Survey 13th July 2016

CAN prices have moved significantly lower this week as the Irish fertiliser season moves to a close. Competition in the Munster region has seen top-lift CAN break below the €200/t price barrier. However, distributers and merchants have been slow to pass through the fall in wholesale prices which has seen wholesale bulk CAN trade on the continent at €145/t. Cut and pasture sward prices have also moved lower.

Many EU farmers in Northern Europe are being quoted €175/t, which is at a significant discount to Irish prices. Over all fertiliser volumes for the season are expected to be down somewhere between 5% to 7% compared to the previous year where sales for the 12-month period were just shy of 1.4mt.

Fertiliser Price Survey 8th July 2016

Fertiliser sales have slowed considerably over recent weeks. Good grass growth and a carryover of fodder coupled with low commodity prices has seen farmers reign in their spend on fertiliser this year. Over all fertiliser volumes for the season are expected to be down somewhere between 5% to 7% compared to the previous year where sales for the 12-month period were just shy of 1.4mt.

On the price front purchasing groups and volume buyers have been well rewarded this season achieving significant discounts on officially quoted prices. However, the price gap between international wholesale and farm gate retail fertiliser prices has widened significantly in recent weeks. The best quotes for granulated CAN are around the €210/t price mark. Fertiliser suppliers have upped the price of fertiliser in the North to prevent leakage across the border as sterling continues to devalue against the euro. The considerable fall in German bulk wholesale CAN prices of €145/t has not been reflected in recent farm gate prices.

IFA has intensified its fertiliser campaign for the abolition of anti-dumping and customs duties on non-EU fertiliser entering the EU. A series of high level meetings involving IFA President Joe Healy and Munster Regional Vice Chairman John Coughlan have been held with the EU Commission and a number of the world’s largest fertiliser manufacturers from the Middle East, the US and the Ukraine. In response Fertilisers Europe (FE) has beefed up its lobbying campaign with the EU Commission for the retention of duties. Some FE members are becoming increasingly uncomfortable with this stance on duties as the campaign has focused attention on the high margins that EU manufacturers have reaped at farmers’ expense over the last decade. Interestingly, a new lobby group has been formed by North African DAP and MAP producers, supported by EU manufacturers to campaign on the Cadmium issue. Phosphorous from this region has a very high cadmium content and is used by a number of the EU’s larger manufacturers in the production of NPK compounds. Most of the world’s phosphorous which has very low cadmium levels is subject to the EU customs tariff. If FE have their way with the Commission EU farmers will be forced to pay significantly more for P fertiliser as the process of removing cadmium is extremely expensive.