Merchants and farmers at odds over protected urea supply

High prices and tight supplies at merchant level are hitting usage of protected urea by farmers.

Farmers seeking to purchase protected urea for silage ground report that supplies are proving very difficult to source from co-ops and merchants.

However, merchants claimed that restricted supplies were the consequence of slow demand for the product from farmers. They said the high price of protected urea this spring had been reflected in reduced sales.

The cost of protected urea is currently running at €430-440/t, around €35-40/t above the price being paid for bulk urea.

However, merchants report that with CAN available for €280-290/t, it is very difficult to get takers for protected urea – even though the cost per unit of N is still lower with the protected urea.

Although fertiliser importers insist that they have sufficient urea in stock that could be treated, merchants are slow to purchase large quantities of protected urea because of the reduced farmer demand.

“We have enough on hand to meet current demand, which is very limited. But if there was a surge we’d be in trouble,” one Leinster merchant admitted.

The slow uptake of protected urea will be worrying news for the farm sector, as increased usage of the fertiliser is a key element in agriculture’s efforts to reduce greenhouse gas (GHG) emissions.

“This could put a real hole in the Teagasc’s MACC curve,” one merchant maintained, referring to the Marginal Abatement Cost Curve on which farming’s GHG reduction strategy is based.

Meanwhile, Liam Woulfe of Grassland Agro has predicted that urea prices have peaked, despite the continuing increase in oil prices.

Brent crude prices have increased by 25pc since the start of the year to reach $66/barrel this week.

However, Mr Woulfe predicted that urea prices have peaked and will settle slightly lower for the remainder of the year.

 

Indo Farming