Much has been written about the volatility of fertiliser in terms of price, supply and demand but the region’s farmers also face pressure with their other major inputs – agrochemicals and fuel.

Agricultural purchasing group Anglia Farmers is a leading authority on the fuel market. On behalf of its 1900 members, the group sourced 58 million litres of fuel last year and predict 61 million litres for this year.

The group’s fuel product manager Nigel Collen said:

“The current fundamentals for oil worldwide are simple. There is massive over supply and demand is continuing to fall, which under normal circumstances would indicate prices should fall.

“However, oil is a traded commodity where equities and currency are inextricably connected. As a consequence the paper traders - rather than genuine supply and demand - are still driving the direction of oil price.

“Over recent months oil has mirrored the erratic movement of equities both up and down, which tends to reflect traders’ confidence in world economies and this dictates whether they buy into safe havens such as currency or higher risk trades through the equity and share markets.

“The net result is an oil price which has found some upward movement from its lowest point at the end of 2008 but which is likely to remain range bound for the next few months between $48 and $54 a barrel unless some major geo political event occurs to change the fundamentals.

“In real terms this means it is a good time for farmers to start filling up farm tanks with gas oil ahead of harvest whilst prices are stable and at a level approximately 50% less than the run up to harvest last year.”

With an annual spend of around £35 million on agrochemicals for its members, Anglia Farmers is well-versed in this market too. However, even with this spend, the pressure in on in terms of supply and demand and the group is urging its members, more than ever, to forward plan and commit on required volumes.

Nigel Last, who is agrochemicals general manager at Anglia Farmers, stresses this is because the UK is no longer such a strategic market for agrochemical manufacturers:

“As with oil, we are competing in a global market and the challenges of the global credit crunch are as applicable in agrochemicals as anywhere.

“We are seeing inflation driven by the decline in the value of the pound and securing supplies in a world market is becoming increasingly challenging. Returns for global players denominated in US dollars or euros look much more attractive in the developing nations such as India, China and in South America where – in addition to favourable currencies - population growth and consumer choice offer huge potential.

“The UK is a mature market and has to compete for product in a world where demand matches or outstrips supply. In addition, prices can only rise as the regulatory burden continues to grow and manufacturers invest many millions in supporting existing products and developing new, more effective, replacements. Agrochemical residues in our food and the environment are now measured at the parts-per-billion level - that’s equivalent to one second for every thirty years of your age - and work continues to reduce these further.

“Securing best value deals for agrochemical inputs now relies, more than ever, on planning and commitment. Farmers and growers able to support their buying group or supplier in this way will be in the best position to reap the benefits.”