Demand drives up critical fertiliser shortage

23 Aug, 2018 10:35 AM
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UNPRECEDENTED demand for nitrogen fertilisers since the late season break and a raw materials shipment to WA which did not arrive last month, has led to shortages at a critical time.

Fertiliser suppliers have scrambled to keep up with demand for urea and some liquid forms of nitrogen fertiliser such as UAN (urea ammonium nitrate) and the CSBP product Flexi-N.

The possibility of a bumper harvest across the Wheatbelt, following the late break and widespread good follow-up rains, has seen farmers looking to maximise yield and protein potential by spraying or spreading nitrogen fertilisers on grain crops.

Some are also looking to boost legume crops which can fix nitrogen to feed subsequent crops.

Demand almost exceeded supply in 2016, which produced a record 16.6 million tonnes grain harvest and this year the demand spike for nitrogen fertilisers, particularly in liquid form where it can be sprayed in conjunction with a fungicide after the wet weather, has seemingly caught suppliers short.

The current bumper harvest forecast overturned earlier predictions of a significantly reduced harvest, which were based on the lack of rain through autumn and early winter.

Farm Weekly understands fertiliser suppliers had not built up stockpiles because they did not want to be caught holding substantial supplies if the rains had not arrived in time to salvage the season.

The situation was compounded when a CSBP shipment due last month did not arrive, leading to a temporary shortage of raw materials.

CSBP, one of the State’s biggest manufacturers, importers and distributors of fertilisers and industrial chemicals, supplies ammonia to commercial customers who produce liquid fertilisers, so the missed shipment also impacted on other manufacturers and distributors.

CSBP has described recent fertiliser demand as “unprecedented” and said demand for nitrogen has been about 50 per cent higher than expected during July and August, when compared with the average of the past five years.

It followed higher-than-average demand in May and June, CSBP said.

CSBP general manager Tanya Rybarczyk said wet weather this year, combined with the fact that last year’s good growing conditions has meant very low nitrogen levels left in soils, accounted for the unprecedented demand by farmers.

“CSBP has been working hard to meet increased demand and to supply our contracted customers with additional shipments, including Flexi-N and urea arriving (since August 3),” Ms Rybarczyk said.

“More urea is expected in late August as well as a Flexi-N shipment in mid-September.

“Our capacity to supply quickly as demand increases rapidly is limited by the substantial lead time required when importing fertilisers – urea, NS (nitrogen and sulphur) fertilisers and Flexi-N, which is up to 10 weeks in the case of the popular liquid nitrogen fertiliser Flexi-N.

“The higher than normal demand for Flexi-N was being met with supplies of locally manufactured product and imports.

“Capacity to meet the peak of that unforecast demand was disrupted in July, when a shipment destined for CSBP did not arrive as planned causing a temporary shortage of raw material needed to make Flexi-N,” Ms Rybarczyk said.

She said CSBP was supplying some granular nitrogen to its customers and farmers who might need more should contact their local area manager to discuss options.

Summit Fertilizers’ Frank Ripper said the only product in Summit’s suite of fertilisers disrupted by the ammonia shortage was liquid UAN (urea ammonium nitrate).

“We can still supply some UAN, just not in the quantities that we would like,” Mr Ripper said.

“The other nitrogen fertilisers and MAXamFLO in particular are flowing out the gate in big quantities,” he said.

Mr Ripper said Summit received a shipment of urea in the last fortnight and its ability to supply granular fertilisers was “reasonably comfortable”.

He said demand for fertiliser had been building since the rains started as farmers assessed how their crops were fairing.

“With each successive rainfall they’re weighing up what their potential yield might be against the cost of feeding their crop,” Mr Ripper said.

CBH Group fertiliser manager David Pritchard also noted increased demand and rising prices.

“We’ve seen a noticeable increase in demand and contracting from growers in the Geraldton zone and the wider Kwinana zone for all of our fertiliser products, with the uptick in nitrogen greater than 2016-17 when WA produced a record harvest,” Mr Prichard said.

“Globally, fertiliser prices have firmed across the board as the broader market reacts to tightening supply on the back of China significantly decreasing exports in line with their environmental objectives,” he said.

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