Record high fertiliser prices a strain on profitability

[{“type”:”text”,”content”:”#### Relative affordability of fertiliser nnUsing a relative ratio between the relationship of the fertiliser price and the market price of grains, we get an indicator of the relative affordability of fertiliser. For example, if maize prices rise and fertiliser prices remain constant, fertilisers would be relatively more affordable. However, should fertiliser prices rise, and the maize price remains constant, fertilisers will be relatively more expensive. Grain SA has developed an affordability index. The index enables producers to determine and compare the affordability of fertilisers with the previous yearnnThe affordability index is the ratio of the price of urea to the maize price at a given time. An affordability index above 1 indicates that fertilisers are less affordable compared with the base year, while below 1 stipulates more affordability. Figure 1 shows that fertiliser is currently less affordable when compared to the base year (2006) and the period between 2015 and 2020, where the index was below 1. Since the beginning of 2021, fertiliser prices have been rising, while maize prices have remained relatively constant. What is clear from the graph, is that although fertiliser prices are on record levels, the relative affordability is still better than in 2008, when fertiliser prices were also on previous records. The difference in the current situation is that maize prices are also relatively high, which makes fertiliser more affordable compared to 2008.”,”position”:0,”id”:”WJQIJKxsGydCQdFx”}]