Australia secures fertiliser from Indonesia to meet crop needs

[MELBOURNE] Australia will purchase 250,000 tonnes of agricultural grade urea from Indonesia to help fill gaps in its supply left by disruptions from the war in Iran.

In a deal facilitated by the two governments, Incitec Pivot Fertilizers will purchase the urea from Pupuk Indonesia Holding, fulfilling about 20 per cent of Australia’s remaining requirements for the upcoming winter crop, which includes major grains and oilseeds such as wheat, barley and canola.

Although there’s more to do, “this additional volume will go a long way to shoring up critical supplies to Australian farmers”, Incitec’s president, Scott Bowman, said in a statement.

Prices of fertiliser have doubled in parts of Australia since the outbreak of the war. About 60 per cent of the nation’s supplies of urea normally travel through the now largely shut Strait of Hormuz. Some growers are rotating to less fertiliser-intensive crops to deal with the growing uncertainty, which will likely reduce the amount of wheat grown.

Like much of South-east Asia, Indonesia is a major importer of Australian agricultural produce, especially wheat.

Indonesia has a surplus of 1.5 million tonnes of urea, which opens up an opportunity to export to countries including Australia, Indonesia’s Vice Agriculture Minister Sudaryono said in a separate statement. Other nations, including India, the Philippines and Brazil, have also expressed an interest, he said. BLOOMBERG