UK: British farmers benefit from weaker Euro in fertiliser markets
The new fertiliser season, which began in late May, has seen Britain’s growers paying some 5% less than last year.
Meanwhile, their counterparts in mainland Europe are facing 5% higher prices, says Ken Bowler, Marketing Manager for GrowHow UK, a UK manufacturer of ammonium nitrate and true compound fertilisers.
For the coming season, Mr Bowler believes that currency movements will exacerbate an already volatile global market as the relative strengths and weaknesses of the US dollar, sterling and the euro continue to be in flux.
Speaking at Cereals 2012, Mr Bowler said: “A lower opening price has encouraged a brisk start to the season with growers ordering at least some of their requirements for the coming year to take advantage of lower prices.
“The weakness of the euro against the dollar has currently made urea less competitive and this, in turn, is likely to have an effect on the availability of imports as the market turns to ammonium nitrate.”
GrowHow supplies British growers with ammonium nitrate from its two manufacturing sites at Ince, Cheshire, and Billingham on Teesside.
Illustrating the effects of currency, Mr Bowler pointed to the price movements in urea since September last year. In dollar terms, it has come back some 15%; in sterling it is back around 7%; whilst in euros, the price has risen about 1%.
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“It is too early to predict how the whole season will develop, particularly as issues concerning the future of the euro continue to play out,” he said.
“Meanwhile, India is reported to be about to place a very large urea order of over one million tonnes. This will affect the market and availability in the short term.
“While global demand appears to be continuing to increase at around 3% a year, there is talk of increased capacity coming on stream, but some of this keeps being delayed by teething problems during commissioning, and forecasting its effect on pricing remains uncertain.
“Supply is also likely to continue to be affected by availability of gas. For instance, Pakistan has imported far more nitrogen fertiliser than normal due to internal shortages of gas.”