Ballance general manager of sales Jason Minkhorst said in an email to its customers that gal DAP prices have increased by US$200 per tonne since January.
The co-operative lifted its DAP price by $99/t, Urea and SustaiN are up $35/t, PhaSedN is increasing $15/t and manufactured phosphate products are increasing $14/t.
“International DAP prices have continued to rise since our last price change on March 1. Unfortunately, we have absorbed as much of this cost increase as we can, and our DAP price will be increasing by $99/t from April 1,” Minkhorst said.
He says these prices are at a five-year high and are impacting farmers and growers all over the world.
International urea and phosphate rock prices were also on the rise, with the former being driven by a short supply of global nitrogen, and phosphate rock is largely being driven by increases in freight costs due to global shipping pressures.
Ravensdown lifted its prices on April 1.
“We continue to see strong international demand and rising global prices for DAP, urea and sulphur in conjunction with escalating freight costs,” a Ravensdown spokesperson said.
Rabobank analyst Wes Lefroy described global fertiliser markets in the bank’s Agribusiness Monthly for April as being gripped in “a perfect storm”.
“We expect that global prices will begin to subside in April, initially for urea, before phosphates follow later in Q2. For local farmers acquiring phosphate, relief will be too late for this season,” Lefroy said.
Lefroy cited three reasons that are driving the high fertiliser prices.
He says strong global grain and oilseed prices incentivised Northern Hemisphere farmers to buy up ahead of spring planting.
Secondly, there have been price hikes in raw materials such as natural gas and coal used in urea production and thirdly, global freight prices have added as much as 5% to the cost of products between ports because of demand and logistical disruption.
“In the face of global higher prices and higher freight rates, local farmers can expect to pay higher prices for urea this season. We do expect global prices to ease from April to June, but this may be too late for this importing period,” he said.
Lefroy expected prices to ease mid-year as Northern Hemisphere demand drops off, although it may take several months for its effects to flow through the market.
For farmers, the big question will be whether the high prices remain this spring when the arable sector starts sowing, Federated Farmers board member Colin Hurst says.
“That will be a bit more problematic because that’s when the biggest usages of DAP go,” Hurst said.
“Here’s hoping that the supply and demand internationally, that is affecting these products, comes back more into balance.”
The lift in prices have come as some begin autumn fertiliser applications, however, Hurst understood the new 190kg/ha cap on nitrogen fertiliser had softened demand.
There were also alternative, less expensive options than DAP if farmers needed to apply fertiliser in the autumn.
He says one positive for farmers was that when international prices did fall, it should be quickly passed on to farmers because the two biggest players in the NZ fertiliser market are co-operatives and not corporates.
“The expectation is that when international prices drop, farm prices will drop too in response,” he said.
