Fertiliser famine threats to hit harvests

Feb 5 2008 by Steve Dube, Western Mail

A SHORTAGE of fertiliser threatens to hit farm production this year.

The price has doubled in 12 months and products are in short supply, with manufacturers and distributors unable to say when things will improve.

“We can’t get any,” said Graham Hughes, general manager of Carmarthen and Pumsaint Farmers.

“In a normal year we would expect to be selling at least 8,000 tonnes by the end of April.

“We’ve had nothing for over a week and the last delivery we had was only 300 tonnes, which we sold to six farmers straight away.”

Clunderwen and Cardiganshire Farmers arable general manager Richard Carlisle said the company still had some stock, but it was becoming a problem.

He said, “We have not yet run out but it’s heading that way and the price will be inhibitive for people to actually use it.”

Mr Carlisle said the standard 20/10/10 grade was selling at £160 a tonne at the start of the season last October. Now it is nearly £300.

“There is a world shortage and we could potentially run out completely in the UK,” he said.

“Those who have not ordered may not get any at all. The people who are really going to suffer are the sheep and beef boys because their prices have been so bad.

“The arable boys are laughing all the way to the bank as long as they did not sell forward because they’re getting £180 to £190 a tonne compared with £65 a tonne a year ago.”

Rosie Carne, marketing manager for the leading fertiliser company Yara UK, said the problem dates back to 1999 when 3.5m tonnes was taken out of world production levels.

Now the end of the set-aside subsidy and increased grain production across the world to meet growing demand in China and India and the rise of biofuel production in the United States, coupled with high energy costs had created a shortage and a sharp rise in prices.

In addition, potash and nitrogen are in particularly short supply. And most forecasters say it could be two years before the problem eases.

“Supply and demand has not been an issue until now when we have suddenly started to see a wholly different situation,” said Ms Carne.

“The answer is to get the orders in early. We are working very closely with our distributors to make sure that we can satisfy as many of our customers as we can.

“The whole industry is working that way. We are working as hard as we can to supply what we can supply, but we can’t create stuff we haven’t got.”

It’s a situation that looks unlikely to change in the near future.

Calum Findlay, fertiliser trader for Gleadell Agriculture, said the need for more nitrogenous products in the UK is greater than ever as more land continues to be brought back in to cultivation.

“This season’s demand is set to reach almost two million tonnes and with little or no imported ammonium nitrogen arriving, supply is now king – no longer price,” he said.

“The global nitrogen supply picture suggests that even with new production capacity coming on stream it will be 2010 before supply once again catches up with demand.

“Even with lower gas prices global demand will continue to dictate high prices and combined with record low world stocks of both phosphate and potash the days of cheap fertiliser are now probably lost forever.”

Mr Findlay said the UK fertilisers market, like the grain market, has changed and is now driven by global events.