After several weeks of climbing fuel prices, agricultural diesel prices have finally eased somewhat over the past eight to 10 days.
Fuel prices began to dip two weekends ago and into last week, but rose again a little by the end of the week. As we went to press this week, prices of 1.42c/l to 1.50c/l (VAT inclusive) were being quoted for Marked Gas Oil (MGO), more commonly known as green diesel.
Still far in excess of what Irish farmers and contractors are accustomed to forking out, green diesel is back about 10-12c/l on average from the highs of 1.60c/l (VAT inclusive) two or three weeks ago. With fuel trading at such high levels, those purchasing in more volume will buy green diesel several cents per litre cheaper, while cash payment v credit will also have a similar impact on pricing.
Fluctuating prices
Continued unrest in Ukraine, political tensions and the weakening of the euro against the dollar are driving fluctuations and uncertainty in fuel pricing.
These continued variations are making it difficult for contractors to provide quotations for work.
Still far in excess of what Irish farmers and contractors are accustomed to forking out, green diesel is back about 10-12c/l on average from the highs of 1.60c/l (VAT inclusive) two/three weeks ago.
Contractors have been forced to increase silage rates since the season kicked off, when green diesel was trading as low as 1.25c/l (VAT inclusive).
Rates of €160-€180/acre (VAT inclusive) for precision-chop silage are being charged in parts. Meanwhile, as the combines begin to roll, the Association of Farm & Forestry Contractors in Ireland (FCI) has released figures stating that the breakeven rate for operating a combine harvester for 2022 will be €70/acre plus VAT or €80/acre VAT inclusive, before straw chopping.
Speaking to a large number of fuel suppliers this week, they were also adamant that supply continues to run at normal levels, while all were adamant that credit supplies will continue to be kept tight.
Crude oil
International oil markets remain extremely volatile. Brent crude oil was trading at $102 to $104/barrel on Tuesday evening, having fallen dramatically from $114/barrel that morning. Not far from the lows of $98 to $100/barrel on 16 March, pricing is still back on the highs of $128/barrel earlier this month when sanctions were first imposed.
However, the big factor at play is that oil traded in dollars, meaning currency fluctuations affect Irish pricing. This week, the euro slumped to a 20-year low against the dollar. The value of the euro fell by almost 1.3% against the dollar to $1.0281, its weakest since December 2002.
This is said to be driven by fears of an economic downturn in Europe. At the start of 2022, one euro would have bought $1.14, while today, one euro will buy you less than $1.03.
According to Bloomberg’s options-pricing model, there is a 60% chance the currency will hit parity versus the dollar by year-end.
After several weeks of climbing fuel prices, agricultural diesel prices have finally eased somewhat over the past eight to 10 days.
Fuel prices began to dip two weekends ago and into last week, but rose again a little by the end of the week. As we went to press this week, prices of 1.42c/l to 1.50c/l (VAT inclusive) were being quoted for Marked Gas Oil (MGO), more commonly known as green diesel.
Still far in excess of what Irish farmers and contractors are accustomed to forking out, green diesel is back about 10-12c/l on average from the highs of 1.60c/l (VAT inclusive) two or three weeks ago. With fuel trading at such high levels, those purchasing in more volume will buy green diesel several cents per litre cheaper, while cash payment v credit will also have a similar impact on pricing.
Fluctuating prices
Continued unrest in Ukraine, political tensions and the weakening of the euro against the dollar are driving fluctuations and uncertainty in fuel pricing.
These continued variations are making it difficult for contractors to provide quotations for work.
Still far in excess of what Irish farmers and contractors are accustomed to forking out, green diesel is back about 10-12c/l on average from the highs of 1.60c/l (VAT inclusive) two/three weeks ago.
Contractors have been forced to increase silage rates since the season kicked off, when green diesel was trading as low as 1.25c/l (VAT inclusive).
Rates of €160-€180/acre (VAT inclusive) for precision-chop silage are being charged in parts. Meanwhile, as the combines begin to roll, the Association of Farm & Forestry Contractors in Ireland (FCI) has released figures stating that the breakeven rate for operating a combine harvester for 2022 will be €70/acre plus VAT or €80/acre VAT inclusive, before straw chopping.
Speaking to a large number of fuel suppliers this week, they were also adamant that supply continues to run at normal levels, while all were adamant that credit supplies will continue to be kept tight.
Crude oil
International oil markets remain extremely volatile. Brent crude oil was trading at $102 to $104/barrel on Tuesday evening, having fallen dramatically from $114/barrel that morning. Not far from the lows of $98 to $100/barrel on 16 March, pricing is still back on the highs of $128/barrel earlier this month when sanctions were first imposed.
However, the big factor at play is that oil traded in dollars, meaning currency fluctuations affect Irish pricing. This week, the euro slumped to a 20-year low against the dollar. The value of the euro fell by almost 1.3% against the dollar to $1.0281, its weakest since December 2002.
This is said to be driven by fears of an economic downturn in Europe. At the start of 2022, one euro would have bought $1.14, while today, one euro will buy you less than $1.03.
According to Bloomberg’s options-pricing model, there is a 60% chance the currency will hit parity versus the dollar by year-end.
This is a subscriber-only article
SHARING OPTIONS: