The price of fertiliser is falling across the globe as farmers pull back from buying at record prices – but European farmers appear last in line for any discounts.

US purchasers of plant nutrients saw a 3.2% drop in the price of nitrogen, last week, which follows a month of downward prices. Brazilian farmers have also cooled demand for fertiliser, which has been driving down prices as supplies have piled up. However, European buyers are still seeing a premium of around $260/t for DAP over the global average.

Tom McIvor, a fertiliser expert from CRU, said: “The vast majority of the world is now in a very low P and K demand environment, which is more than offsetting reduced availability from a number of suppliers. The European premium for DAP phosphates to other markets had opened up against other markets and this is making Europe the best price option for sales, despite the lack of demand, adding more price downside.

“Furthermore, the European power situation is not as bad as some had predicted. The region is well stocked, nuclear power rates are surging and demand is down due to European controls. This has meant quite a lot of ammonia capacity has gone back on-line, bringing down the N cost more than expected and helping suppliers to offer at lower prices. We are still expecting gradual declines in the European P and K prices right through next year.”

Meanwhile, in the US, Bloomberg Intelligence analyst, Alexis Maxwell, told The SF. "Farmers are pulling back on pricey inputs. Global ammonia, phosphate and potash demand are all down year to date."

In the US, grain prices have steadied so many farmers are revisiting costs and potentially switching fertiliser applications to the spring, which could brings its own supply issues.

US exports of nitrogen fertiliser jumped to a multi-year high this summer after surging natural gas prices in Europe drove up costs of producing the crop nutrient there, making US shipments more competitive. Exports from the US, the world's third-largest producer, soared to 370,000 short tonnes of nutrient in August, more than double the year-earlier total, according to recent US Census Bureau data.

European buyers such as France, Belgium, Norway and Lithuania are outbidding domestic buyers in both the US and in other exporting countries, like Indonesia and Malaysia.

The largest fertiliser importer in the world, Brazil, seems to be well stocked after large purchasing earlier in the year. This had seen prices halve from the record April highs.

Farmers are waiting to see how farm the price might drop. Jeferson Souza, fertiliser analyst for Agrinvest Commodities, in Brazil, said: "Prices of some fertilisers are still far above previous years. Farmers see the price dropping and will keep waiting to make purchases."