The Russian invasion of Ukraine is causing a stir in Australia’s agricultural sector, with fertilizer prices set to rise by a third in the coming months.
Fertilizer is one of the biggest input costs for Australian farms. Its price is already high due to the impact of the conflict on global supply chains.
James Maxwell, senior knowledge manager at the Rural Bank, predicts significant increases in already high fertilizer prices.
“As Russia is a major producer of various fertilizer products, reduced exports have fueled fears of shortages,” Maxwell said.
“There is potential for further increases of 20-30% in current prices, not only due to the shortage of fertilizer products, but also due to the increase in gas prices, which is a key input for most nitrogen fertilizers.
Russia is a major global producer of fertilizer and its key ingredients, such as potash, phosphate, urea and nitrogen.
The Russian-Ukrainian conflict has rattled global markets, affecting prices and supplies of everything from wheat and barley to fertilizers and oil.
National Farmers Federation chief economist Ash Salardini has warned that the price of potash fertilizer could jump 20-30% in the coming months.
The cost of urea-based fertilizers has already tripled over the past year, while potash-based fertilizer prices are also expected to increase.
As grain and oilseed prices have risen, adding value to Australian crops, farmers face huge fuel price hikes shortly before the season’s main grain planting window.
Diesel costs rose between $2.10 and $2.40 per liter this week.
“Diesel is a huge source of energy for use on farms, tractors, generators, etc. Diesel is the primary source of energy for farmers,” Mr. Salardini said.
Australian Associated Press