Urea plant faces forced closure over gas supply
One of New Zealand’s largest fertiliser plants could be forced to shut down for four months as uncertainty looms over gas supply.
Ballance Agri-Nutrients is offering fixed price nitrogen to farmer shareholders from September.
The co-operative says the offering is the first of its kind and will offer shareholders more certainty on their input costs.
In its initial market pilot phase, Ballance shareholders will be able to take advantage of the fixed price per tonne on both Nrich Urea or SustaiN, for a six-month contract period, with a minimum contract volume of 30 tonnes and a maximum contract volume of 500 tonnes.
“We’ve been listening to our shareholders who have been asking for more certainty when it comes to purchasing their urea,” says Jason Minkhorst, general manager customer at Ballance.
“We want to offer our shareholders greater stability and confidence around their input costs and make it as easy as possible for them to plan ahead,” he says.
By offering its shareholders a fixed price, Ballance can better support its supply chain planning and ensure its shareholders have a reliable onshore supply of urea.
“As a globally traded commodity, the fluctuating price of fertiliser creates high risk for farmers, so leveraging a fixed price on some or all of their fertiliser gives them peace of mind,” says Minkhorst.
A limited volume of fertiliser will be available as part of the initial Fixed Price N market pilot, and shareholders wanting to take advantage of it will need to apply via the Ballance website.
Shareholders that are successful in their application for Fixed Price N will benefit from any downward price movements for the volume that hasn’t been fixed, however they will need to use their full contracted volume first.
“We acknowledge that Fixed Price N won’t work for all our shareholders, but we know that providing more options overall is important,” explains Minkhorst.
“Launching Fixed Price N demonstrates that we are listening to our shareholders and is the first of several product and service innovations we will be announcing in the coming months.”
Applications open in early September and shareholders can apply at http://ballance.co.nz/fixed-price-nitrogen
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