GLOBAL political events have been a driving factor in raising fertiliser prices to stratospheric heights over the past 12 months.
According to Agri-Access Australia principal Peter McEwen, decisions in Russia, Egypt and China have been pivotal in the prices paid in Australia.
At the Australian Association of Agricultural Consultants (AAAC) Outlook 2021 event in Perth recently Mr McEwen discussed the year that was and what may lay ahead in the first quarter of 2022.
Over the past year, there has been new export tariffs brought in by Russia, Morocco and Egypt.
China has also imposed restrictions on fertiliser exports, affecting the release of products already in port.
This limiting of supply and extra fees are all continuing to drive the price up.
Taking a peak into history, in particular the past 15 years, Mr McEwen said it was a repeat of what happened in 2008, albeit more extreme.
"Urea is trading at an all-time high, it's surpassed the highs of 2008," Mr McEwen said.
"Potash will also surpass the highs of 2008 in the first quarter of 2022, while phosphates are firm."
In the past two months nitrogen has "skyrocketed", now also surpassing the record highs of 2008.
"These are ridiculous prices that weren't forecast," Mr McEwen said.
"Political interference has certainly had a major impact.
"Getting granular potash into Australia for example could very well surpass $800 a tonne in the new year depending on what happens in Belarus."
Mr McEwen has also noticed a change in the way grain and fertiliser prices are linked in the markets.
"Historically if grain prices go up fertiliser follows and in recent times there's been a bit of disconnect there with grain prices and fertiliser," he said.
Moving into the start of the growing season for many overseas countries, Mr McEwen predicted Russia, China and Egypt would ensure supply to service their domestic markets.
"In China, as of November 12, the locals pay $450/t for nitrogen, whereas if it's exported it's at least $900/t, so they are looking after their own," he said.
Despite the high prices, the main concern at the AAAC Outlook was not so much on price, but on securing fertilisers at all, with many consultants suggesting that farmers they represented would happily pay the price if they knew they could get it.
Mr McEwen was confident that the availability of supply would return in early 2022.
"Certainly in the new year I would expect you to be able to pick up your fertiliser,'' he said.
Although it is expected the Eastern States may struggle with shipping, Mr McEwen believed Western Australia was well position due to a more organised system and ships already secured but he didn't think this would help bring prices down anytime soon.
"Given that shipping is happening, that there are ships on the water and given the lags, I don't see the price going down," he said.
"I don't see any respite, if anything prices will continue to go up."
Want weekly news highlights delivered to your inbox? Sign up to the Farm Weekly newsletter.
