News

June 16, 2008

Fertiliser Prices, And Shares, Are Fuelled By Soaring Energy Costs

By Sally White

As oil hovers around US$140 a barrel the knee-jerk reaction to yet another shock headline always seems to be to think of the cost of motoring. Rarely in the headlines is an equally important casualty – the cost of fertiliser. Since most nitrogen-based fertilisers are made from natural gas, which tracks the oil price, the cost of these is roaring away even faster.

In the last six months many nitrogen-based fertilisers have doubled in price. And this is after some tripled in price last year. Add in the fact that another vital fertiliser, potash, is now rising in price again, and here are harbingers of more food price hikes to come. With the pressure on to improve crop yields to meet global food and biofuel demand, and to capitalise on soaring agriculture markets, farmers are in no mood to resist. 

A new high in the potash price has just been...