Fertiliser orders for 2022 were higher than average despite input cost

Shannon Beattie
By Shannon Beattie
Updated May 10 2022 - 12:51pm, first published May 9 2022 - 10:30pm
Regardless of who you speak to, fertiliser orders for 2022 were still above the long-term average across the board.

WITH fertiliser prices sky-high heading into this cropping season, speculation was rife over what it would mean for the State's main input suppliers and overall the report has been a mixed bag.

Last year's record crop gave some growers a bit more cash in their pocket than usual and fertiliser orders increased, despite the rising prices, while in other cases, a drier summer left some hesitant to pull the trigger and orders were down on those placed for 2021.



However fertiliser orders for 2022 are still above the long-term average across the board.

For the season to date, relative to last year, global fertiliser prices have increased approximately 180 per cent, 150pc and 13pc respectively across the potassium, nitrogen and phosphorus nutrient suite.

CSBP Fertilisers general manager Mark Scatena said in general, it was normal for demand for fertiliser and the timing of this demand to be somewhat volatile, reflecting seasonal conditions and global market trends.

"Notwithstanding pricing volatility being more extreme this season relative to recent seasons, demand for fertiliser is largely consistent with expectations," Mr Scatena said.

"Commitments and collections are running ahead of last season, with the timing of demand also reflective of offshore and local supply chain concerns including the impacts of COVID and international disruptions such as the Ukraine conflict."

Current pricing levels reflect historic highs, with the very elevated current pricing environment largely driven by global factors including gas prices, international sanctions on key potassium and nitrogen producing regions and locally enforced export bans.

While spot prices are at record highs and similar to the peaks of 2008, many growers committed to cropping compounds and seeding inputs in the second half of 2021 calendar year, below the current historic pricing peaks.

In general, local market prices reflect these global fluctuations, with timing differences driven by contracting and shipping windows, exchange rates and freight rates.

Summit Fertilizers marketing and sales executive manager Eddy Pol said most growers would have on average paid at least double for their phosphates compared to the previous year, may be up to three times the price.

"Orders are a bit less than last year but that was a very high year due to the season starting early and nitrogen in high demand," Mr Pol said.

"However, this season is higher than the average - many growers realise they need to put back in after a big crop and nutrient export in 2021.

"Good returns from last year and the high grain prices and outlook has given them confidence to use fertiliser at current prices."


For CBH Fertiliser, a newer player to the market, bookings were up 10pc on the same time last year and purchases for urea were well advanced, with large amounts ordered earlier than normal due to price spikes in February and March.

While Nutrien Ag Solutions' investment to commission two 25,000 tonne UAN tanks last year has paid dividends with the increased capacity allowing the company to increase the amount of fertiliser supplied to WA growers this year.



"Fertiliser orders are normally placed in the spring of the year prior to the current season," said WA region manager Andrew Duperouzel.

"With the recent rain, we know farmers are confident that this season's winter crop is starting on a strong footing with good subsoil moisture across most cropping areas."

Given the market volatility, it is difficult to forecast price outlooks, with different fertiliser markets - UAN, urea, potash, phosphate - being impacted by diverse drivers.

Market forces including Belarus potash tariffs, Russian sanctions affecting UAN and urea, shipping constraints, Indian urea tender timing and China fertiliser export bans will all play a part in dictating pricing in the short term.

Mr Pol said with the volatility in the market, he was not prepared to try and forecast what prices might do.

"However, due to limited export supply available from Russia, Belarus and China, I don't expect to see prices fall rapidly in the short-term as supply will be tight," he said.



"Other than urea and UAN, most products are now in store or onfarm.

"Suppliers will monitor international prices and seek a commitment from customers to purchase before finalising shipments going forward."

While fertiliser pricing is high, fertiliser application remains a key driver for yield.

Therefore it's important that input affordability is viewed in the context of input price relativity to grain prices, which are also very strong and very high relative to historic levels.

Mr Scatena said CSBP had continued to leverage long-standing supplier relationships and its local manufacturing capability to prepare as well as possible for the balance of the 2022 season and the season beyond.

"We remain well placed to support customer application decisions that are difficult and challenging this season," he said.



"We expect to have adequate supplies of critical seeding fertilisers to meet current market demand."

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