This new pricing reflects increasing demand for raw materials
Having held prices since December to allow farmers to catch up with autumn fertiliser maintenance, Ballance will apply new prices from 1 June 2011.
This latest pricing review reflects increasing demand for raw materials as food producers try to take advantage of rising commodity prices. That demand is causing raw material costs to edge up although we are nowhere near the peaks in demand and international pricing seen a couple of years ago. The continued strong New Zealand dollar does help offset firming global prices, however modest increases to our selling prices are required.
There has been no change to the price of urea. Superten is up $25 to $345, serpentine super has increased $30 to $305, and DAP is up $55 to $1050. Sulphur products have been the most impacted, with sulphur gain 30S up $65 to $410. Potash has decreased in price by $25 to $845. For full price details please refer to the price list.
We have taken the opportunity to undertake a comprehensive review of through-store charges, taking into account increased operating costs. We last increased through-store charges in 2008. We have made every effort to hold these steady for as long as possible, however they now need to be adjusted to take into account the impact of inflationary pressures over the past three years.
What is driving prices?
While n-rich urea remains stable and potash has eased slightly, prices across the remaining products reflect the firming of international raw material costs.
Urea prices have gone through their usual rises and falls and our aim has been to smooth this volatility for shareholders, taking advantage of our Kapuni facilities to hold prices steady.
Strong demand for sulphur combined with reduced production output has made sourcing sulphur challenging and has pushed costs upwards.
DAP prices stabilised in April, supported by steady demand from India which accounts for around a third of global trade.
Outlook
Internationally, fertiliser prices will be influenced by demand which will, in part, be influenced by weather. In the United States, for example, planting of corn is being hampered by poor conditions.
The seasonal low point for urea has passed and demand out of South America and also Europe will support price firming.
What impact will the price changes have on-farm?
These pricing adjustments should have a minimal impact on farmer’s pockets, given the majority have already taken advantage of the good autumn conditions to catch up with maintenance applications.
The dairy, sheep and beef sectors can offset DAP price increases by substituting with superphosphate blends to get the most value out of fertiliser applications.
Our focus in on supporting farmers to get their plant nutrient applications rates right so the effectiveness of fertiliser budgets is maximised.
To discuss how you can optimise your fertiliser spend contact your local Technical Sales Representative on 0800 222 090.
1 June 2011
