Fertiliser price probe

28 Mar, 2008 09:33 AM
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ESTABLISHING the volume of fertiliser supply and availability in Australia, and reporting it to farmers and the industry in a timely and transparent manner, is expected to be one of the pivotal issues raised by a special Federal Government-appointed committee into fertilisers.

The Senate Select Committee on agriculture and related industries was recently convened to conduct a special investigation into the sky-rocketing cost of fertilisers in Australia.

The committee will examine anecdotal accounts taken from farmers, truck drivers and local distributors which suggest there’s actually plenty of fertiliser on hand in Australia, despite contin-ued reporting of a world shor-tage.

The cost of fertiliser has increased by more than 150pc in the past 12-18 months, raising further concerns among industry members about spiralling farm input costs.

Summit Fertiliser executive manager of marketing and sales Murray Brown said international prices were moving weekly, making the market mobile.

A local fertiliser company, that did not want to be named, said it was currently charging DAP at $1250/t, MAP at $1250/t and Urea at $625/t for collection from its Kwinana depot.

Summit Fertilizer’s list price for the current market had a slightly lower figure for its three main fertiliser products with DAP at $1143/t, MAP at $1180/t and Urea at $640/t.

Those figures did not include discounts for early season contracts.

The committee is due to report its findings on June 16 with submission deadlines due on April 3.

Major Australian fertiliser companies contacted this week in an attempt to determine the level of stocks on-hand refused to comment.

Fertiliser Industry Federation of Australia executive manager Nick Drew also would not comment on the domestic situation.

Mr Drew did attempt to put the current high prices and shortages into a global context.

“The scale of recent price increases has been dramatic,” Mr Drew said.

“For example, the price for a tonne of diammonium phosphate (DAP) from the USA increased by 160pc between January 2007 and January 2008.

“During the same period the price of urea from the Middle East increased by 53pc. “On top of the purchase price, Australian suppliers must meet the significant costs of sea freight, port charges, storage, handling and distribution before arriving at a sale price to the farmer.”

The committee is being chaired by NSW Liberal senator Bill Heffernan. Sen. Heffernan said it was appointed to review the matter because “something strange is going on”.

He said there were signs of cartel behaviour in the sector and already evidence of price manipulation on a global scale.

He said there were now genuine fears that major companies were using the food and commodities shortage issue as a way of ramping up the price of fertiliser.

WA’s representative on the committee is Labor Senator Glenn Sterle.

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