Ag-chem prices set to rise as China demand grows

Date:02-17-2010

The exchange rate effect and vulnerability to global market conditions stem from the fact few active ingredients are now produced in the UK.

Farmer-owned inputs purchasing and crop marketing business, AtlasFram Group, says its view is crop protection products will show an inflationary increase compared with 2009.

“Because the pound has not strengthened in value against the euro to the level which some might have hoped for, prices of product manufactured in Europe are coming under pressure and can be expected to increase by at least the rate of inflation,” says the group.

China’s economy, it suggests, which is expanding at record levels of 7 to 10 per cent annually, is creating greater demand and pushing up the prices of some active ingredients produced in the Far East.

“One of key issues for farmers this year will be timing their purchases of crop protection products to obtain the best value, but the difficulty for any individual business is deciding at what point to commit,” says the group.

AtlasFram says one of the advantages of being in a group is the advice from the purchasing team.