INDUSTRY NEWS
Fertiliser to grow in 2024
By Trevor Dennis MD Haifa Australia
THE global fertiliser market is in turmoil due to strong demand , global shipping issues and China halting exports . While prices have retracted significantly from the highs of 2022 , they have not returned to pre-COVID levels . So , what does this mean for almond growers looking to replenish their trees after what we think is a bumper crop being harvested now .
Global shipping Let ’ s start with global shipping . The events in the Middle East , including the Houthi rebels effectively closing the Red Sea , has caused shipping companies to divert vessels around Africa . This diversion comes at a cost , with voyage times increasing by around 14 days , plus additional costs . These costs are being felt by importers , with further pressure on already stretched supply chains adding to the rising prices . To put a direct figure on shipping increases , we are talking in the order of $ 50 USD / MT . Shipping is also being impacted by changes in global trade . There are fewer containers leaving China and , thus , less frequent deliveries to Australia . These changes are not only impacting container freight ; it is affecting bulk cargos of MAP and Urea and we can see this in the local lead times for supply of these fertilisers . In the last week , we have seen Urea rise from around $ 600 to $ 800 / MT , and the earliest collection being late April . On a local front , we have had industrial actions on the wharf of both the stevedores and now the ETU .
China exports When we look at China ’ s decision to halt exports of both granular and specialty products , we see a regulated economy that recognises the benefit of fertiliser in feeding their population . Producers in China can make more money exporting , however , this diverts product away from Chinese farmers and inflates local pricing . The Chinese government is due to review export arrangements in May . The question , or gamble , is will they open exports for the products we need ? The next question is will this allow enough time for delivery to Australia to meet our demand window . China is a major producer of sulphate of potash ( SOP ). Without Chinese supply , producers in other countries have been overwhelmed with demand . The market feedback is that their production is booked up until August this year , which would mean delivery to Australia in October for application . It is not only SOP that China is not supplying . Soluble MAP is not being exported from either China or Russia , and , as a result , there is a lack of soluble options for phosphates .
Global demand On the increasing global demand , we saw record prices in 2022 , and in 2023 all parties in the supply chain suffered losses as they sought to clear out high-priced inventory . The result is that the supply chain is empty on a global level . From the manufacturer to farmers ’ sheds , we all have reduced our holdings . As the snow is starting to melt in Europe , the demand for specialty fertiliser is increasing . At Haifa , we are busy meeting this demand and we have tens of thousands of tonnes on the water and being
Haifa ' s Trevor Dennis is urging growers to act now to secure their fertiliser supplies for the coming season .
shipped to farmers . One issue Australian almond growers face is that we need products shipped from Europe in May to ensure supply 60 days later , for application in July . May is still peak demand for the European season and this clash causes companies to allocate product to the most economic market . If you want to test the strong demand and empty the supply chain , ring your local distributor and ask for SOP or potassium nitrate . The global shipping and supply situation is not only a concern for our fertiliser requirements . The crop protection industry is under similar pressures . It becomes a decision of whether supply is more important than trying to obtain the cheapest price . While some chemicals have been air-freighted into Australia in the past , the cost is worn by the consumer . In this market , we would suggest local agricultural companies will be looking after their loyal clients first . So , what does this mean for growers ? We encourage you to take action in the below order :
• Secure phosphate supply .
• Secure potassium supply .
• Look at nitrogen requirements and source .
• Lock in chelated trace elements .
• Lock in crop protection products .
• Look at storing what you can on farm , or at least bringing your requirements forward by four weeks .
The above situation can all be confirmed through a discussion with your local rural outlet , or a simple search on Google . Things can change , but our primary advice is to choose your risk profile on obtaining inputs for the 2024 growing season .
References
• Menace on the Red Sea – MSC rewires entire global network ( seatrade-maritime . com )
• Announcement of charges in relation to Red Sea / Gulf of Aden situation - from Far East Asia | Maersk
• Maersk Operations through Red Sea / Gulf of Aden | Maersk
• China Bans Fertiliser Exports Until April ‘ 24 | Czapp
industry . australianalmonds . com . au
15