Fertiliser prices have seen a sharp increase since the beginning of the month. Merchants are reporting price increases of £30/t to £40/t on nitrogen.

This week, prices of £200/t are being quoted for 27% CAN, up from £170/t in early August.

Indications are that prices could climb to £210/t in the next week as spot prices are currently changing on a daily basis with increasing demand.

Some merchants added that the volumes they are able to purchase at present are being limited by fertiliser manufacturers, leaving them with no option but to increase prices on forward sales of nitrogen.

Currency

Currency is a key factor in price rises after sterling weakened against the euro and dollar in late August.

In addition, demand for nitrogen has risen as buyers look to cover deliveries on product they have forward-sold. With fertiliser production levels down on previous years, limited supply is also affecting price.

Several merchants also indicated that with higher milk prices helping cashflow, there has been growing interest from dairy farmers looking to source fertiliser now, as prices tend to be lower compared with spring.