New Zealand’s two main fertiliser companies are monitoring skyrocketing energy prices in the Northern Hemisphere to see what impact it could have on prices.
Soaring natural gas prices in Europe has led to two fertiliser plants shutting down in northern England. Fertiliser makers use natural gas to create ammonia, a key component in many fertiliser products.
Ballance general manager of sales Jason Minkhorst said they were monitoring the global situation and expect European fertiliser demand to be met by China, which could impact prices locally.
“We have already seen some pressure on global prices. As a co-operative we are doing as much as possible to manage this for our farmers and growers [for example] leveraging our local manufacturing at Kapuni.”
A Ravensdown spokesman said the increase in energy costs was is beginning to have an impact on overseas fertiliser manufacturers of ammonium-based products.
“For Ravensdown, there is no reason to think this will impact on surety of supply but, in general, energy costs can ultimately affect prices and the current overall trend is one of escalating N prices reflecting global supply and demand.”
In late June, urea prices hit a 10-year high to reach just under $800/tonne.
At the time, both companies cited rising energy prices as one of the reasons for the increase, along with high freight costs and soaring demand on the back of strong cropping prices in Brazil and India.
