Fertiliser prices are starting to fall to normal levels as global supply has started increasing, suggesting that financial pressure on farmers will ease thereby helping to in the drop in prices of fresh produce.
According to financial services company Rabobank, nitrogen, phosphate and potash fertilisers will all see price declines as global markets begin recovering from the impacts of Covid-19, the war in Ukraine and record-high energy inflation levels.
Forecasts suggest the affordability index values will return to roughly the same levels they were at three years ago.
Additionally, recent analysis from the Energy & Climate Intelligence Unit found that the cost of fertiliser, pushed up during the gas crisis, has been adding around £78 million a month to UK farmers’ bills.
The report follows another similar forecast made in earlier by an importer of fertiliser who said he expected food prices to drop as the product’s cost had fallen to levels not seen since the Ukraine invasion began.
John Fuller, chairman of Brineflow in Great Yarmouth, Norfolk, told BBC, “We’ve had to have much larger vessels, we’ve had to invest in new berths at Sunderland and Great Yarmouth, but the industry has found a solution.
“The cost of fertiliser is on the way down and that means cheaper food for everybody.”
Due to the Russia-Ukraine war, 70 per cent of European ammonia capacity was reduced or shut down. Prices of some fertiliser hit more than £1,000 a tonne last year, but have since reportedly dropped to about £450 a tonne.
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