WA farmers¹ back pockets have been hit hard by the cost of fertiliser that is skyrocketing on the ba

12 Apr, 2007 07:00 PM

The average cost of fertiliser has increased by $100 a tonne on last year¹s price to $550/t, with nitrogen products hit hardest.

The steep price increase is being attributed to an unprecedented demand for fertiliser on the world market, which began rising late last year and in early January.

CSBP sales manager Wayne Hiller said the price of nitrogen/phosphorus products had in-creased 160pc during the past three months, rising from $400 in mid-January to $650.

Mr Hiller said urea-based nitrogen products had also been struck hard over the past year, rising $100/t from $450/t to $550/t.

Australian fertiliser consumes around 3-4pc of the world¹s supply and is considered a fairly small player in the global market, but remains subject to the vagaries and dramatic spikes of world demand.

This worldwide demand is driving the spiralling costs and exposing WA growers to more financial pain after last season¹s drought stripped grain production by more than 50pc from the 2005 harvest.

Fertiliser is considered one of the largest and main input costs, making up to 25pc of some farmers¹ overall expenditure.

Mr Hiller said the last thing drought-affected farmers would now want is to face is bulging input costs in a year most have marked down for recovery.

Fertiliser Industry Federation of Australia executive manager Nick Drew confirmed fertiliser prices had reached a record high.

³The prices are certainly unusual and in real terms this is the highest they have ever been,² Mr Drew said.

³The local supply has been dramatically reduced and at the same time there has been a big boost in world demand.²

Mr Drew said fertiliser prices were being driven higher on the back of huge demand from America¹s booming ethanol sector.

He said the increase in US ethanol production had resulted in more corn plantings and consequently a higher demand for fertiliser.

Mr Drew said while tight supply and strong demand was pushing fertiliser prices up, there was some good news with the strong demand for oil crops taking the end product¹s price with it.

He said the Australian fertiliser industry was driven by world markets despite the fact it had an extra competitive market and an efficient system in place.


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