This season, fertiliser price trends have only been moving one way – up.

The usual expected dips in price have not materialised and farmers are no doubt wondering if this drop will come next autumn and winter.

It’s an interesting time to be examining the markets

Speaking with Julia Meehan, the managing editor for fertilisers at Independent Commodity Intelligence Services (ICIS), for the Irish Farmers Journal podcast, it does not appear that there will be a letup in prices anytime soon as fertiliser markets are currently in unprecedented times, with many factors at play.

Rising energy prices, drought in South America and COVID-19 are just some of those factors.

Meehan added that there are so many factors playing into fertiliser markets.

It’s an interesting time to be examining the markets, a bullish time to be a producer, but a bearish time to be a buyer of fertiliser.

We’ve got record high gas and energy costs

Meehan explained how there have been daily outages in the production of ammonia. Workforces are limited in some production facilities due to COVID-19.

There are delays at ports, port space is in short supply and gas prices are high.

“We’ve got record high gas and energy costs,” Meehan noted, and this is one of the main influences on the cost of the final product as it is used in the production of nitrogen-based fertilisers.

COVID-19 pandemic

Describing the effect of COVID-19 on fertiliser prices, Meehan explained that the pandemic is affecting markets more now than it did when the virus first hit.

The world is reopening at different rates and there is “pent-up demand for food”, she said.

People are also moving around more and this is feeding into the price of gas, which is needed for production.

Also hitting demand is favourable weather

Security of supply is another reason prices are higher. Uncertainty in the markets often causes a rise in prices.

Also hitting demand is favourable weather. For example, conditions have been excellent for grass growth in many parts of Germany.

Grain prices are also relatively high and Meehan said that if you graphed grain and fertiliser prices together, they would mirror each other in an upward trajectory.