Fertiliser prices look set to rise

Ravensdown Fertiliser plant, at Awatoto, Napier. Photo / Hawke's Bay Today

One of New Zealand's largest fertiliser suppliers is questioning how long it can hold its rates in the face of surging global commodity prices.

Ravensdown, a co-operative wholly owned by farmers, says the price of urea has increased by US$100 ($130) a tonne since September last year, while the cost of DAP - another nitrogen-based fertiliser - had almost doubled since late 2009.

"We don't have a crystal ball but we encourage farmers to take advantage of the current pricing, weather conditions and spreading capacity to get their nutrients on now," said chief executive Rodney Green.

A spokesman for the co-op said it was too early to say how much prices would increase by if they were put up.

Green said the company sourced its products from the global market and was subject to international market forces. Rising food prices led to an upward movement in world nutrient prices, he said.

Bank of New Zealand economist Doug Steel said rising commodity prices were a "net-positive" for New Zealand's economy.

"We are getting paid more for our products. Unfortunately there is some of this negative offset to deal with - rising costs."

But, Steel said, costs would probably increase at a slower rate than farm revenues.