Rain prompts nitrogen shortage

Both liquid and granular forms of nitrogen fertilisers have been in short supply after an initial rush by grain growers following widespread rains last month.

According to industry sources, all liquid forms of nitrogen fertiliser remain in short supply, with only existing orders likely to be supplied before August.

Supplies of granular urea, which was unavailable for immediate pick up from some fertiliser suppliers earlier this month, are now becoming available, but farmers are urged to move quickly if they want it.

A shipment due in Kwinana at the weekend is expected to alleviate some of the immediate urea shortage.

Farmers have been advised by suppliers and distributors that price rises for nitrogen fertilisers are likely if supply continues to fall short of demand.

Industry sources were not clear on any particular cause of the shortages - other than a sudden spike in demand for nitrogen fertilisers after the rains, with growers aiming to boost yield from late start crops in a potentially short growing season.

The long lead time required for local suppliers to order bulk chemical volumes from a now very limited number of global core constituent manufacturers has been partly to blame, according to some sources.

Based on the very dry first five months of the year across the WA agriculture region, local fertiliser suppliers seem to have assumed this cropping season would be poor, or average at best and reduced the volume of chemical fertilisers on order from overseas manufacturers, according to sources.

In overall terms, the volume of agricultural chemicals ordered by WA suppliers from the handful of core constituent manufacturers is insufficient to influence bulk batch production of particular products.

Basically, according to the sources, unless WA suppliers accurately estimated demand for particular chemicals and placed sufficient volume orders with manufacturers before the start of the season, they are unlikely to be able to buy more during the season from the manufacturers as their production will have moved on to other chemicals required in other parts of the world.

The only alternative for WA suppliers that under-order, according to the sources, is to try to buy in-demand chemicals from other suppliers and distributors to resell to regular customers at an increased price or accept a loss on the deal.

To a much lesser degree, a similar situation applies with urea and other granular fertilisers, with shipment times having to be factored in to the local supply chain and meeting demand.

A late or delayed order could leave a local distributor with a ship load of urea stockpiled until next season.

One industry source said a shipment of nitrogen fertiliser bound for Kwinana had to bypass the port recently, leading to some fertiliser suppliers being unable to fill orders earlier this month and leaving CSBP Ltd the only local supplier with stocks of nitrogen fertiliser.

However, other industry sources and CSBP have not confirmed this.

Other sources said urea was advertised at a cheap price and the suppliers could then not meet the demand spike.

York grain grower and WAFarmers president Rhys Turton, who worked in the local fertiliser industry for 11 years, said on Tuesday he had ordered granular urea with CBH last week.

"I was told that was fine, but pickup would have to be after July 16," Mr Turton said.

"Because of the late start (to the season) a week's delay didn't matter to us, so we placed the order at about $540 or $545 a tonne.

"Then the Landmark representative rang up and asked if I'd thought about my urea requirements because supplies were going to get tight and the price might go up," he said.

Mr Turton said he was not aware if WAFarmers had received any complaints from farmers about a nitrogen fertiliser shortage.

A Mid West farmer, who did not want to be named, said he had also ordered urea through CBH Group's fertiliser division but was advised that it could not be supplied when he wanted it.

"I had to buy urea off CSBP," the grower said.

"Apparently there's been some sort of significant delay in supplies of nitrogen arriving right at a critical time when it is needed most.

"I've got plenty of liquid (nitrogen fertiliser) now.

"There's supposed to be a shipment arriving later this month that should solve the problem, so I've been told," he said.

CBH Group fertiliser manager David Pritchard said a urea shipment was expected at the weekend which would enable the organisation to meet orders.

"The recent rain across most parts of the grain growing regions in the State has seen a significant uptick in the demand for urea," Mr Pritchard said.

"CBH Fertiliser is expecting a urea shipment this weekend, which will allow us to continue meeting current contracts and service new queries from growers."

CSBP, part of the Wesfarmers conglomerate, said in a prepared statement in response to Farm Weekly questions, that it could not comment on the broader fertiliser market.

"But as far as CSBP's supply of urea goes, we constantly monitor stock compared to customers' requirements and at this stage are confident we can continue to meet demand," the statement said.

"For Flexi-N (a commonly-used liquid nitrogen fertiliser for broadacre application which now accounts for about half of CSBP's total nitrogen sales), we are fully committed for July against stocks, but with a shipment due later this month, customers can still order Flexi-N for August collection," it said.

Australia's largest fertiliser distributor Landmark Operations Ltd, owned by Canada-based Nutrien, the world's largest provider of crop nutrients, protection, services and feed, confirmed nitrogen fertilisers in WA were in short supply.

Landmark's regional fertiliser manager Matt Applebee said liquid nitrogen supplies remained "tight", but the company was confident it could supply regular customers.

"Basically, with chemical we'll be able to look after regular customers who support us," Mr Applebee said.

"With urea, we have sufficient on hand to supply our Macrofertil and Landmark customers (Landmark acquired fertiliser competitor Macrofertil Australia Pty Ltd last year) and outside opportunities."

"I think at the start of the season we (fertiliser suppliers) thought a bit like farmers, that with the late start it was only going to be an average season and adjusted our orders accordingly."

Primaries of WA general manager Andrew Lindsay also confirmed a shortage of nitrogen fertilisers in both granular and liquid form in WA.

"I don't know what caused it, but there is definitely a shortage at present," Mr Lindsay said.

Summit Fertilizers was contacted but declined to comment.

Elders also declined to comment and referred Farm Weekly back to its fertilisers supplier CSBP.