Fears of a serious fertiliser-related credit squeeze at merchant level abated this week, following confirmation that the country’s credit union network will finance purchases through its Cultivate loans package. The news comes against the backdrop of a 50% fall in European gas prices, a key driver of fertiliser costs.
Fears of a serious fertiliser-related credit squeeze at merchant level abated this week, following confirmation that the country’s credit union network will finance purchases through its Cultivate loans package.
The news comes against the backdrop of a 50% fall in European gas prices, a key driver of fertiliser costs.
This has raised hopes that later-season fertiliser supplies will increase and prices will ease.
The surge in fertiliser prices – which has pushed the cost of products such as urea to over €900/t – sparked widespread fears that merchants might not be able to offer credit to farmers for purchases this spring.
Ease the pressure
However, the provision of Cultivate loans to finance the purchase of fertiliser from independent merchants is likely to ease the credit pressure.
The Cultivate loans, at an interest rate of 6.55% over 12 months, will be available from 40 of the country’s credit unions.
Bank of Ireland has said it has stocking loans available at 5.31% to 6.31%, but added that the SBCI low-cost Brexit loan scheme is also available to farmers for working capital needs such as fertiliser purchases.
The variable interest rates for these loans are 2.95% for a minimum loan of €25,000.
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