Soaring nitrogen prices

On January 20, 2013

“Fertilizer prices are ridiculous” says protesting farmers – The Huffington Post February 13th 2012

2008 and 2012 has given unacceptable all time high nitrogen fertilizer prices.  The global trade price of ammonia- and

NH3 prices 1966-2012

NH3 prices 1966-2012

urea-nitrogen reached more than 750 USD/tN.  This is more than double the historic average, and only heavy government subsidies have prevented sever up-raising from poor populations in the developing world. 

The underlying force is the knowledge that faced with possible food shortage, the desperate buying power of the world is enormous, irrespective of degree of development and standard of living.  The fact is we are willing to kill for food, and nitrogen is the direct basis for food production.  The low grain reserves have in a short period driven the market price of key nitrogen products into a pair of peaks, and the last one is still prevailing.

 

The global expectation that food will become a smaller and smaller part of our cost of living is not realistic nor sustainable. The market value of oil is ten-folds higher than the actual production and delivery cost and on top of that the end-user in the developed world is willing to add another 2-300% to the price. When competition for terminal oil (also called peak oil) becomes a cruel reality, the investment in world scale fertilizer plants will not cope with demand, due to lack of economic stability and cost of fossil energy.

 NH3 consumption 1850-2012

The individual continents, countries, regions and all the way down to the single farmer will turn to the available renewable energy sources to meet the most basic of all needs, food.

 

Comments are closed.