Interplay of global politics with grain and fertiliser markets

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With a new trading year ahead of us there are too many questions still without answers around the SPS agreement the UK government is discussing with the EU.

With a new trading year ahead of us there are still too many questions still without answers around the SPS agreement the UK government is discussing with the EU. Politics usually generates uncertainty but this constant kick of the can down the road is unhelpful. The divergence between Mainland UK to the EU has been increasing for years as we have limped along, post Brexit, as the follower of change rather than a leader. Unfortunately, the reliance on the EU was in place for too many years and the ability to fill the knowledge gap and set up our own domestic processes and departments seems largely to have failed.

All the moaning about Brussels and their rules came to an end, but the legacy stayed and the UK signed up to almost all the previous EU legislation, just transposing it into UK law. From a cereal perspective nothing much changed post Brexit, we can still import and export cereals with the EU. We must comply with the EU’s higher standards for a few chemical MRL’s and Toxins and they ship their higher quality grains to us, note that we allow higher levels of Don in our milling wheats and currently have no official T-2 HT-2 levels for food grade cereals. These may seem minor, but when the final SPS agreement is signed, we will probably have to comply 100% again with the EU quality standards. There will be other things such as chemistry and inputs to comply with but my real question is who is going to be in Brussels negotiating any of this stuff on behalf of UK Agriculture PLC and where are they getting their UK information from to say that we can comply with requests to higher standards?

At this point it’s important to remind you that Northern Ireland has had to comply with EU law since Brexit. This is one reason why we have seen the imports of grains increase to the UK. Customs data clearly shows the rise under the heading UK, but what most don’t realise is how much of the annual imports for the last two years have gone to Northern Ireland rather than mainland UK. While mainland UK is being paid not to grow crops, which used to ship to NI, we have watched annual cereal production drop dramatically especially with extreme weather events, while EU and III country grains have added to our import stats.

In the future, do government hand over everything technical to Brussels if its ok for the EU, it must be OK for the UK and if the rules between us and the EU match then the paperwork and queues of lorries moving processed product are removed, BUT what unintended consequences could it mean for raw commodities such as grains. How can a farmer anticipate a change in active chemistry rules or MRL’s one year out? Please think about what inputs you use on your crops in the coming growing season. Ask questions and keep close to any SPS press announcements. Kicking the can may work for Westminster but if the nation wants food there must be planning in advance because there is a whole growing season just about to start and a change in requirements for harvested crops this time next year may just have to wait another 12 months before being instigated!

Fertiliser matters

The extension of the US–Iran ceasefire back in mid-June marked the first meaningful step towards restoring the flow of trade through the Strait of Hormuz, allowing key fertiliser commodities such as urea, phosphates, sulphur and ammonia to move more freely once again.

This development prompted a significant correction across global fertiliser markets, giving manufacturers greater confidence to adjust pricing. Consequently, values have fallen back from recent peaks to levels that are considerably more attractive for buyers. Many market participants believe prices may now be close to their floor, with stronger purchasing activity at current values, combined with the approaching implementation of CBAM, expected to provide support and potentially drive prices higher in the weeks ahead.

Volatility remains a key feature of the market. At the time of writing, President Trump has stated that the ceasefire has effectively ended, with both sides reportedly resuming military strikes. Despite this renewed uncertainty, current offers represent an attractive buying opportunity and are worthy of consideration for securing fertiliser requirements before market sentiment strengthens and prices begin to move higher again.