A leading fertiliser manufacturer is warning farmers that prices will start to rise as international demand grows.
Ballance Agri-Nutrients chief executive Larry Bilodeau said that after a year of prices near or below cost for manufacturers, international pressure was mounting for prices to increase.
In the past two months, he said, international DAP and urea prices had risen by up to 45%, while sulphur, a major ingredient in superphosphate, was "headed for uncertain territory".
"Making longer-term pricing forecasts is still problematical, but all the indicators show that pressure is starting to mount on international prices for fertiliser products," he said.
In December, Ballance cut the price of superphosphate by 20%, but he said that could be short-lived.
Yesterday, Rabobank warned farm input prices could rise as companies replenished stock, and Mr Bilodeau said that was happening, but demand was still exceeding the supply of many fertiliser products.
"Much of the pressure on prices is coming from companies around the world replenishing their inventory pipelines, which they have deliberately allowed to run low over the past 18 months.
"The northern hemisphere crop-planting season will begin soon, and there is a rush to replenish the supply chain in time," he said.
He could not predict how high prices would go but said he was confident they would not reach the record levels of 2008.
