Fer­tiliser price tipped to rise

Countryman - - HARVEST - Melissa Wil­liams

WA grow­ers may have to al­lo­cate a sig­nif­i­cantly higher pro­por­tion of their bud­gets to fer­tiliser and chem­i­cal ex­penses go­ing into next year.

Some farm man­age­ment ad­vis­ers and sup­pli­ers are pre­dict­ing prices for th­ese es­sen­tial crop and pas­ture in­puts will re­main at cur­rent highs, es­ti­mated to be up from decile 1 to decile 5-6 av­er­age lev­els, go­ing into the first quar­ter of 2019.

This ap­plies to ni­tro­gen, phos­pho­rus and potas­sium fer­tilis­ers and some key her­bi­cides.

Un­der­pin­ning the price rises are tight global sup­plies and high de­mand, a low Aus­tralian dol­lar and high fuel prices. The sit­u­a­tion has prompted calls for grow­ers to closely as­sess their pric­ing op­tions for next sea­son as they un­der­take an­nual bud­get­ing.

Agri-Ac­cess prin­ci­pal Pe­ter McEwen said dur­ing the past 16 months, global fer­tiliser prices had steadily in­creased from 10-year lows for most nu­tri­ents.

He said de­mand for fer­tiliser was up glob­ally on the back of solid grain prices, but sup­plies were af­fected by lower Chi­nese ex­ports, espe­cially of urea. “This is be­ing driven by en­vi­ron­men­tal con­trol mea­sures in China and a fo­cus on sup­ply­ing its own do­mes­tic mar­ket, with a net re­sult be­ing higher fer­tiliser price base,” he said.

“Re­cent US sanc­tions on Iran are also im­pact­ing on urea sup­ply and pric­ing.”

Mr McEwen said some key global price changes since July 2017 in­cluded a 30 per cent in­crease for widely-used DAP/MAP (Free on board from the USA Gulf), from $343US/tonne to $436US/t.

GMOP (FOB from Van­cou­ver) has risen 24 per cent from $247.50US/t to $308US/t, urea (FOB from the Arab Gulf ) has jumped 83 per cent from $180US/t to $330US/t and UAN (FOB from the Black Sea) has in­creased 106 per cent from $119US/t to $245US/t.

“Freight costs are also up sharply, with a key ship­ping in­dex in­creas­ing by 84 per cent in the past 16-month pe­riod,” Mr McEwen said. “At the same time, the Aus­tralian dol­lar has de­pre­ci­ated by about 10 per cent from US79¢ to US71¢ and this has con­trib­uted fur­ther to the big im­pact on the fer­tiliser costs.”

WA-based agri­cul­tural chem­i­cal sup­plier 4Farm­ers pre­dicts most chem­i­cal prices will rise go­ing into next sea­son, mostly be­cause of a con­tin­u­ing tough en­vi­ron­men­tal regime in China that has led to the clo­sure of many fac­to­ries and con­strained sup­plies for ex­port.

The com­pany said it ex­pected more planned shut­downs and/or re­forms in the ma­jor chem­i­cal-pro­duc­ing prov­inces, such as Jiangsu, Shan­dong and Zhe­jiang.

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