UK nitrogen prices have seen a 40 to 50 per cent increase compared to July 2016, largely due to global factors, especially urea pricing.
Nitrogen prices have risen over the past 12 months as urea demand has affected the price of Ammonium Nitrate (AN) - the product predominately used for nitrogen fertiliser in the UK.
Wynnstay fertiliser manager, Dave Mitchell said the recent surge in urea prices has been influenced significantly by the activity of three key global players; China, India and the USA.
The UK accounts for only one per cent of global nitrogen fertiliser demand – and less for phosphate and potash.
Mr Mitchell said: “For example, China has seen a considerable drop in their own urea production, leading to a swing from exporting four to five million tonnes of product last year to possibly becoming an importer this year. This had created an unexpected deficit in their urea supply, contributing to the upwards movement of urea prices.
“At the moment, the market is also waiting for India to make a second purchase of urea product this season, which could equate to as much as one million tonnes, again putting pressure on overall supply worldwide.
“This pressure has been accentuated by the USA’s lower than expected production volumes. Their overall domestic production of urea will be lower than previously predicted due to delays in opening new plants which means that they will be much more reliant on imports to fulfil any shortfall in product.”
Although these factors have led to an increase in AN prices for growers in the UK, Mr Mitchell highlights that it is worth noting that UK produced AN is competitively priced compared to European product.
He said: “Nitrogen is not as cheap as it has been in recent months. However, in comparison to European AN product, the UK market is steady and providing competitive prices on-farm.”
