Fertiliser prices have eased off their historic highs over the past 12 months, with both of New Zealand’s two fertiliser co-operatives lowering their prices for nitrogen.
Ballance Agri-nutrients has dropped its urea prices 15% since October.
In October it reduced its nitrogen prices by $100 a tonne and reduced them a further $100/t earlier this month.
It has also reduced the cost of superphosphate by $80/t.
Rival co-operative Ravensdown has reduced its price of N by $100/t, with prices falling 20% since last year’s peak. Superphosphate prices have come down by about 10%.
Its urea (N-Protect) price is down to $1199/t, 20% lower than last year’s peak.
Ravensdown supply chain general manager Mike Whitty said the easing in prices has been caused in part by Europe coming out of winter, but also because countries stockpiled products in response to earlier supply constraints.
“The big question will come up in the next month to six weeks about what demand is like in the northern hemisphere and will that see a rally in prices,” Whitty said.
“I think it’s lining up pretty positively as long as we don’t see above expected demand in the northern hemisphere,” he said.
The exchange rate will also affect the price. After a 15% depreciation of the New Zealand dollar over the past year, in the past two months there has been some strengthening of the currency – but that will need to continue if there are going to be any benefits, he said.
“With so many factors at play, including energy prices and world politics, we remain on a watching brief. This period will set the outlook for our spring.”
Ballance Agri-nutrients general sales manager Jason Minkhorst said having two farmer-owned co-operatives dominating NZ’s fertiliser market largely protects farmers from seeing the large price spikes seen overseas.
He described the fertiliser outlook as “unstably stable”, but that outlook will rest on the actions of India and the northern hemisphere – particularly Ukraine.
“So the big question mark in the market is what happens in India with their really high demand for fertiliser, what happens in Europe in spring and what gets planted in Ukraine.”
The factors that caused prices to lift – food insecurity, inflation, the economic instability caused by the Ukraine war and China’s policy of export restrictions around fertiliser – had not gone away, he said.
But people have adjusted to the challenges by finding alternative sources and farmers have also adjusted the amount of fertiliser they use.
It took 18 months for prices to escalate and it will take time for them to come down, he said. It would be optimistic to expect prices to keep falling because of these reasons, and it will take time for prices to ease further, he said.
“So unfortunately for those reasons, we are still in a period of high fertiliser prices.”
