Irish fertiliser sales for the first six months of the fertiliser year are up, according to Teagasc’s Situation and Outlook document 2015.
It reports that Nitrogen sales have increased by 1%, Phosphorous has also risen by 7% while there has been a 6% increase in Potassium sales between October 2014 and March 2015.
It also says that fertiliser sales have slowed down from March onwards due to favourable grass growing conditions and because farmers are aware that better prices may be available with delayed purchasing.
Irish fertiliser prices have tended upward slightly for the first half of 2015 with prices expected to fall in the middle and latter stages of the year, it says.
Recent indications have shown downward movement on price in recent weeks, it says.
However, Teagasc added that traders who bought stocks at higher prices will be keen to hold fertiliser prices to ensure they retain a profit margin on sales over the rest of the year.
The report highlighted that the bulk of the fertiliser purchasing at farm level for 2015 will have been completed by the time nitrogen prices reflect the fall in energy prices.
The benefit of lower fertiliser prices may therefore be felt in next year’s production season rather than this year.
International urea prices have fallen as a result of high fertiliser stocks and the change to Chinese export taxation policy, it says.
According to Teagasc the fall hasn’t been as high as expected as Chinese fertiliser manufacturers have tempered the fall by cutting prices gradually.
It says that the expected fall in fertiliser prices as a result of the fall in oil prices has not been a great as first expected.
This has occurred for two reasons, the first of these is the decline in the value of the euro, which has made fertiliser imports into the EU more expensive.
The high gas price in Europe has also slowed the fall in European fertiliser prices. European gas prices did not follow the path of oil prices and have been slow to fall as a result of the Russian situation, it says.
It added that gas prices tend to follow oil prices movements, but with a significant lag in the region of six to nine months.
Therefore, it is only in the second quarter of 2015 that European gas prices will reflect the oil price fall from the third quarter of 2014, it says.
It expects that the weak euro will also limit further gas price reductions in the coming months.