New Zealand farmers are about to be hit by the nation's biggest fertiliser-price rises on record, with superphosphate jumping by $210 a tonne.
The increase is about the same as the whole price for superphosphate less than a year ago and is being blamed by Ballance Agri Nutrientschief executive Larry Bilodeau on soaring costs overseas. "Raw material and shipping costs have risen significantly - far ahead of anticipated levels," he said yesterday.
"It's a shock to farmers - it's a shock to us. In less than 12 months our imported costs have more than doubled. They now represent in excess of 80 per cent of our total operating cost.
"And we have to pay for these ingredients in advance of selling them to New Zealand farmers ... This is a significant cashflow component, and its related interest cost, that is growing massively along with the raw material prices."
One of New Zealand's two biggest fertiliser companies, the Ballance co-operative yesterday signalled a 77 per cent lift in its Superten superphosphate price to $480 a tonne, up from $270.
Ballance has increased the price of a key nitrogen product heavily used by dairy farmers, n-rich urea, by 32 per cent to $921 a tonne, and di-ammonium phosphate (DAP) by 50 per cent to $1412.
Yesterday, Bilodeau said the Mt Maunganui company had been hit by a "perfect storm" of cost increases as aspiring middle classes in India and China demanded Western-style foods, and as other nations divert farmland to producing crops for biofuels.
Bilodeau said: "Products such as sulphur have increased by as much as 400 per cent in a year. The current global fertiliser environment is uncharted territory ... We have never seen the international market subjected to so much unpredictable change."
