NZ farmers face rising urea prices amid global shortage and weak NZ dollar
New Zealand farmers will face higher urea prices this year, mainly on the back of tight global supply and a weak Kiwi dollar.
PRICES FOR most fertilisers are down with the two main suppliers releasing new but as usual almost identical price lists.
Ballance Agrinutrients announced first, on May 31, cutting $10-$80/t off core nutrients in light of increased global supply, and “sluggish” world demand which has seen prices for most of the major nutrients weaken.
“While volatility is always a factor, the immediate outlook is for these prices to remain more favourable for buyers than sellers,” chief executive Larry Bilodeau says.
Increased production capacity for potash, urea and phosphate, due to come “on stream” over the next three years, is easing supply concerns.
“Morocco, for example, expects to produce eight million tonnes more phosphate, a 30% increase in their current production.”
New projects in China are also prompting speculation that tariffs protecting local farmers’ supply during periods of high demand may be abolished.
Weather is another factor, delayed spring planting in the United States and Argentina leading to reduced demand for nitrogen.
Bilodeau notes global phosphate prices remain below those a year ago, with demand slow in key import markets. However, India’s requirements may cause some demand spikes and drive higher prices.
Ravensdown says price changes on products like urea, DAP or ammonium sulphate reflect global trends of lower gas prices and subsequent development of new production facilities. Moves in the US towards self-sufficiency in shale gas could have major long-term implications.
“Just recently, plans for two large ammonia/ urea projects were also commissioned in the American Midwest which will see urea production of 3500 tonnes per day at each of them,” notes chief executive Greg Campbell.
“This is the first time since the 1990s that new nitrogen fertiliser plants are being built in North America. Many US plants that had been mothballed are being brought back to life.”
Tapping the huge shale gas reserves in the US has created a multibillion-dollar industry over the past decade and revolutionised the US ammonia market as it reduces reliance on imports from the Arabian Gulf, says Campbell.
However, the impact of this extra supply on world, and New Zealand, prices is complex and world demand for urea continues its steady rise, he adds.
“Ravensdown will continue to monitor international prices and we are determined to maintain our competitive pricing to bring farmers lowest-cost nutrients on a sustainable basis.”
A brilliant result and great news for growers and regional economies. That's how horticulture sector leaders are describing the news that sector exports for the year ended June 30 will reach $8.4 billion - an increase of 19% on last year and is forecast to hit close to $10 billion in 2029.
Funding is proving crucial for predator control despite a broken model reliant on the goodwill of volunteers.
A major milestone on New Zealand's unique journey to eradicate Mycoplasma bovis could come before the end of this year.
We're working through it, and we'll get to it.
The debate around New Zealand's future in the Paris Agreement is heating up.
A technical lab manager for Apata, Phoebe Scherer, has won the Bay of Plenty 2025 Young Grower regional title.
OPINION: It's official, Fieldays 2025 clocked 110,000 visitors over the four days.
OPINION: The Federated Farmers rural advocacy hub at Fieldays has been touted as a great success.