Firms slash fertiliser prices in face of slump

Mark Wynne blames strong supply and soft demand for the drop.

Bay of Plenty-headquartered Ballance Agri-Nutrients has announced significant cuts to key farm nutrients in response to a global slump in fertiliser prices.

The price review sees urea drop $50 to $525, the lowest price since 2007.

Diammonium phosphate has been reduced by $25 per tonne, sulphate of ammonia by $15 and potash by $10. These changes will flow through to product blends, says Ballance.

South Island-based competitor Ravensdown has also announced price cuts in its fertiliser products.

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

"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," he said.

"This hasn't been helped by Brazil and India who are both suffering from weakening currencies and therefore lowering their demand requirements."

The co-op has been supporting farmers with cash throughout the year - paying out rebates early, holding urea prices through spring, and dropping prices in December.

Mr Wynne said that taking some of the pressure off pricing for shareholders throughout the year would likely flow through to a lower rebate payment than the high levels enjoyed by shareholders in recent years.

"However, we're confident we've done the right thing."

Mr Wynne said Ballance's approach to foreign exchange had helped to offset the weaker New Zealand dollar: "In a tough year like this, these price reductions will be good news for farmers and growers."

With recent rains over much of the country there was a good opportunity for farmers to take advantage of the reduced prices and apply fertiliser now for feed production ahead of autumn.