Sharechat Logo

Fertiliser price pressure likely as commodities recover: Rabobank

Friday 8th January 2010

Text too small?

Global agricultural lender Rabobank is warning that last year's sharp rundown in farm inputs manufacturing threatens price pressure and supply bottlenecks as agricultural commodity prices rebound this year and farmer resume on-farm investment.

"Farm input prices have stabilised at similar levels to 2006/7 and Rabobank expects that most farm inputs will remain above pre-2006 average levels in the short to medium term," says Rabobank analyst Adam Tomlinson in the report.  "An expectation of higher dairy prices in 2010 will push farm input demand above 2009 levels, albeit still well below the historic high levels of the mid-2000's."

Any short term disruptions in farm input supplies would see price impacts caused mainly by energy costs, reflecting the energy-intensive nature of some input manufacturing processes and the use of hydrocarbons to produce products such as nitrogen fertilisers.

Meanwhile, agricultural commodity prices looked likely to remain above 10 year averages as they recovered from last year's slump, which dropped annual fertiliser consumption in New Zealand by approximately 25% below 2007/8 levels, said Tomlinson.

Higher farm input prices were likely to drive farmers to use inputs more efficiently and there was little prospect of the kinds of price spikes seen in 2008, when fertiliser manufacturers were using all available manufacturing capacity for a time.

 

 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Synlait Special Shareholders' Meeting Poll Results
SML receives update on a2MC voting intention
PHL - Opening of Share Purchase Plan offer
ATM - Synlait Special Shareholders' Meeting - a2MC voting update
APL - AGM Date and Director Nominations
COOKS COFFEE COMPANY ANNOUNCES NEW UK BASED BOARD MEMBERS
July 11th Morning Report
PEB - Cxbladder Test Volumes Steady in Q1 25
THL - Resignation of Director update
NPH - Third Quarter 2024 Trade Volumes