Farmers welcome cheaper fertiliser

Fertiliser companies have dropped their prices. Photo by Peter McIntosh.
Fertiliser companies have dropped their prices. Photo by Peter McIntosh.
A price drop by rival fertiliser companies Ravensdown and Ballance Agri-Nutrients will be welcomed by farmers.

Ravensdown's announcement of a $50 per tonne drop in the price of urea, to $525, was swiftly followed by Ballance several days later to the same price. Both companies also dropped DAP by $25 a tonne, sulphate of ammonia by $15 and potash by $10.

The move came on the back of a global slump in fertiliser prices, driven by strong supply and soft demand, Ballance chief executive Mark Wynne said.

"There's plenty of supply in the market at present, with extra production coming on stream and China switching from being an internal consumer of nutrients to an exporter.

"On the demand side, Brazil and India are both suffering from weakening currencies, therefore lowering their fertiliser requirements,'' Mr Wynne said.

The company's foreign exchange approach had helped to offset the weaker currency in New Zealand.

In a tough year like this, the price reductions would be good news for farmers and growers, he said.

It would probably flow through to a lower rebate payment to shareholders, but the company was confident it had done the right thing.

Ravensdown chief executive Greg Campbell said for a large dairy farmer in the grip of a payout downturn, or a sheep and beef farmer dealing with drought or weaker returns, those price differences could mean "thousands of dollars'' staying in their bank account.

That was "far more useful'' to shareholders at this time, than a large rebate cheque later in the year.

"Farmers are resilient and adaptable people, but it's not just up to them to manage their way through these tough times.

"We all play our part in the rural sector and that is about challenging the status quo and asking how things can be done better,'' Mr Campbell said.

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