Despite assurances that nitrogen prices should drop later this year, speakers at an international conference organised by the IFA in Portlaoise on Thursday questioned the overall structure of the European fertiliser industry.

Maixmo Torero, from the International Food Policy Research Institute, said that there has been little attention paid to global producers in a highly concentrated industry. He outlined that the top five countries control more than 50% of global production capacity, while the top four firms generally control more than half of the capacity in each of those countries.

Nikolay Mizulin from Mayer Brown, a legal firm specialising in international and EU law, showed that EU farmers are paying the highest prices for fertiliser in the world and blamed “issues on the supply side” for the price increase.

Import tariffs

Because the EU imports 20% of its nitrogen needs, EU farmers are paying higher prices due to import tariffs, Mizulin said. He added that the easiest and quickest solution to correct the price differential between inside and outside the EU was simply to remove the EU import tariff.

He claimed that producers were against this and presented the share price performance of Yara as the reason why. In simple terms, he said, “as the gas price goes down, Yara’s share price goes up”.

Jacob Hansen, the head of the industry body Fertilizers Europe, disagreed that scrapping the 6.5% import tariff would reduce prices, arguing that it mainly applies to Russia.

Max Shulman, from Copa-Cogeca, an organisation representing some 15 million farmers across Europe, called for openness and for the EU to lift the the tariff for one to two years and let the market show what kind of impact this would have.

The IFA has called on the European Commission to investigate potential breaches in competition and suspend the import tariff.