Fertiliser urea expensive but globally available

Fertiliser urea expensive but globally available

Cropping
Demand for urea fertiliser is low at present but will ramp up with autumn sowing programs.

Demand for urea fertiliser is low at present but will ramp up with autumn sowing programs.

Aa

Urea shortages have hit the headlines in the context of high purity urea used in transport, but urea fertiliser is still available, if dear.

Aa

IN CONTRAST to the crisis surrounding stocks of high purity urea required to make the emissions cutting Diesel Exhaust Fluid (Adblue) analysts say that urea fertiliser is available, if expensive.

While nitrogen fertiliser urea prices have increased up to four times over the course of the past year due to tight supplies and greater demand from farmers seeking to take advantage of high grain prices the industry believes farmers will still have access to product next winter.

Rabobank senior agricultural analyst Wes Lefroy said the origins for high purity urea and urea fertilisers were different.

RELATED: Action needed on Adblue

RELATED: Phosphorus could hit $1500/t

"There are overlapping factors such as energy costs like natural gas but there are also different costs and different markets," Mr Lefroy said.

He said the vast majority of Australia's urea imports came out of the Middle East region.

"Places like Qatar and Saudi Arabia are important producers of urea fertiliser and they often supply Australia with a lot of the product it needs," he said.

Mr Lefroy said December was traditionally one of the periods of lowest demand on the Australian calendar.

"It is difficult to get too much of a handle on local urea markets at this time of year as there is not a lot of immediate demand," he said.

"Imports usually start getting moving in February / March for use during the winter cropping season."

Mr Lefroy said that in line with world markets urea prices were going to be up next year but added there had been no new threat to supply arises in recent weeks.

"Given the current environment globally, strong demand and supply chain and shipping constraints there is always the risk of short-term shortages, especially during autumn when a lot of farmers are looking to take hold of their supplies.

"We could see short-term regional shortages as farmers and retailers wait for supplies to arrive, but at this stage there is nothing more systematic than that.

"There has been some international commentary on world urea fertiliser stocks being fairly tight, but equally we've seen one of the most recent tenders from India was over-subscribed by urea manufacturers which isn't likely to happen if there are no stocks about."

He said it was potentially a different story in the specialist urea market.

"Chinese exports of fertilizers have been heavily restricted, which has also impacted availability of high purity urea for DEF production".

Brett Hosking, Grain Growers chairman, said farmers were impacted on both the transport and fertiliser sides.

"We're hopeful the Adblue thing can be resolved, it looks as though supply is OK up until February so hopefully that allows most of the harvest to be carted, but it is something we are keeping a close eye on," Mr Hosking said.

On fertiliser urea side he said farmers were closely watching prices, which have crept up to $1200-1400 a tonne, but were more concerned about supply.

"If grain prices stay where they are then I think you'll see people willing to absorb the high prices, if we see grain prices come off then you would obviously see a rationing of demand," he said.

"The supply will be the most important thing, the price is something people can work with according to their individual case, if they think it is worthwhile they will buy it, if not they will use a lower rate, but if you can't get hold of it when you want it that is where the problems emerge."

Start the day with all the big news in agriculture! Sign up below to receive our daily Farmonline newsletter.

The story Fertiliser urea expensive but globally available first appeared on Farm Online.

Aa

From the front page

Sponsored by