Farmers hoping for a price correction in the spring fertiliser market are likely to be disappointed as CAN looks set to cost between £600/t and £650/t.

Despite recent falls in the price of gas, which is a crucial part of fertiliser manufacturing, it won’t bring an immediate turnaround.

Having reached record highs on 21 December, UK and European gas prices have been in retreat, plummeting by as much as 60%.

Milder winter weather has also helped cool the gas market

That reduction has been due to a combination of factors, including increased European supply as additional gas, mainly from the US, was redirected to Europe to take advantage of higher prices.

Milder winter weather has also helped cool the gas market.

High fertiliser prices, and lower costs of gas have encouraged major fertiliser manufacturers across Europe to restart production, but according to Rory Deverell, a risk management consultant with StoneX, that is unlikely to have any impact on spring fertiliser prices.

Fertiliser supplies should be much better by May, June and July

He maintained that it is product manufactured in October-December period that is normally available to Irish farmers in the spring.

“Fertiliser supplies should be much better by May, June and July, but the farmers who need it in February and March look like they will be the ones to suffer,” he suggested.

NI merchants

It is an argument also made by local merchants who point out that fertiliser stocks to be shipped this spring have already been manufactured using gas purchased at the height of the autumn price surge.

As a result, the fertiliser companies are unwilling to offload these stocks at discounted rates.

The only positive for farmers is that the recent drop in gas values should curtail any further increase in fertiliser price

In addition, high grain prices are underpinning strong global demand for fertiliser, meaning manufacturers are under little pressure to lower prices.

The only positive for farmers is that the recent drop in gas values should curtail any further increase in fertiliser price.

Early purchase

Given the high prices being quoted by manufacturers, most local merchants have been slow to purchase nitrogen on forward contracts, so actual on-farm prices are hard to come by.

Where nitrogen is in stock in the past few weeks, CAN has been delivered from £580/t to £650/t a threefold increase on the January last year.

Merchants report strong sales of fertiliser throughout November and December, particularly from dairy farmers looking for bulk purchases

Price quotes for urea are extremely limited but where available, the general indication is just over £800/t.

Merchants report strong sales of fertiliser throughout November and December, particularly from dairy farmers looking for bulk purchases. Prices back then ranged from £480/t to £560/t.

Where farmers are planning to buy fertiliser this spring, they should note that merchants require full payment at the time of placing an order.

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