Chemical, fertiliser price rise unease

Canterbury farmers are starting to get uneasy about rising agri-chemical and fertiliser prices.

The Foundation for Arable Research told growers last month there were increasing concerns about the agri-chemical supply chain.

Farmers are being advised to do a stocktake in their sheds and talk to suppliers.

Federated Farmers Arable chairman Colin Hurst said agri-chemical supplies were tight, and the main concern was with fodder crops.

"A lot of the fodder crops — kale, swedes and fodder beet — are established and have had most of the chemicals applied, but there will still be follow-up spraying as well as fertiliser at the moment and going forward."

Most arable farmers have sprayed their herbicides, fungicides and insecticides for the season and seed and grain crops are at the point of harvest.

Mr Hurst said glyphosate was used year round and prices had increased.

"At the start of the year it was $5.50 for one litre of glyphosate, but now they are talking about $13 and percentage-wise it’s absolutely huge. What we are finding within the chemical market is the mainstream companies ... are pretty well sorted. That’s because they are large on an international scale, but between them are the smaller generic companies that are manufacturing in China and if there is one hiccup that puts pressure on the others."

Farmers stockpiling supplies would only make the situation worse.

"I don’t know if there has been some stockpiling of glyphosate. I suspect the glyphosate price will go down sharply when the supply situation is sorted out as glyphosate is a commodity."

Congested freighting routes were causing delays globally. Container ships were waiting for unloading outside clogged ports during Covid-19 and sometimes weren’t arriving from Singapore or Australia, he said.

It wasn’t just agri-chemicals under pressure as fertiliser supplies such as urea and machinery parts were also tight, Mr Hurst said.

Farmers were fortunate their fertiliser suppliers were co-operatives, he said.

"The New Zealand price for urea is just under $1200 a tonne, but the world price is $1500 — so does that mean we are going to get higher prices or are the co-ops helping to keep the price at a fair price? Any hint of a price rise would go up if we were corporatised."

Growers were getting higher returns, but that could turn around, he said.

The curbing of fertiliser exports by Chinese authorities had contributed to the supply pinch.

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