According to The Independent, UK sales of fertiliser fell by a third in April, prompting fears that the resulting fall in yields could lead to even higher food prices.
With prices for ammonium nitrate peaking £1,000 per tonne in recent weeks, data from the Agricultural Industries Confederation (AIC), which represents 95 per cent of UK fertiliser suppliers, shows that the worst affected fertiliser suppliers saw demand down by 70 per cent last month while even the best performers reported a 25 per cent dip in sales.
The trade body said it ‘conservatively’ estimated that sales across the industry were down 35 per cent in April – the most important month for fertiliser application in the UK, and that around half of the year’s expected supply of fertiliser remains unsold.
Jo Gilbertson, sector lead at the AIC, said the situation was “very disconcerting.” He commented, “We normally see peak demand in April. This is uncharted territory for us. Manufacturers can’t keep making [fertiliser] if there are no buyers.”
He urged the government to give confidence that it will be worthwhile producing and buying fertiliser at current high prices but said there was a “fixation from ministers that market forces will fix things,” adding, “It’s political dogma.”
However, fertiliser manufacturer Yara reported a three-fold increase in profitability for the first quarter of 2022, despite a sharp fall in product deliveries. The Norwegian-based multinational made an operating profit of $1.04 billion on revenues of $5.91bn in the first three months of 2022, compared to $322 million and $3.14bn over the same period in 2021. Total product deliveries were 8.35 million tonnes in the period, down from 9.08m tonnes a year earlier.
“Yara’s business model is robust and is performing well in a volatile situation,” says Yara president and chief executive Svein Tore Holsether. “I want to give credit to our employees for their hard work to sustain our operations and deliveries amid war, supply disruption and market price volatility.”