SYDNEY, AAP – The Russian invasion of Ukraine is sending ructions through Australia’s agricultural sector with the price of fertiliser forecast to rise by as much as a third in the coming months.
Fertiliser is one of the biggest input costs for Australian farms. Its price is already elevated due to the conflict’s impact on global supply chains.
James Maxwell, senior insights manager at Rural Bank, forecasts significant rises to already elevated fertiliser prices.
“With Russia being a major producer of various fertiliser products, reducing exports has stoked fears of shortages,” Mr Maxwell said.
“There is potential for further increases of 20 to 30 per cent on current prices, not only due to shortage of fertiliser products, but also due to increasing gas prices which is a key input for most nitrogen fertiliser.”
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Russia is a major global producer of fertiliser and its key ingredients, such as potash, phosphate, urea and nitrogen.
The Russia-Ukraine conflict has roiled global markets, affecting the pricing and supply of everything from wheat and barley to fertiliser and oil.
National Farmers’ Federation chief economist Ash Salardini warned that the price of potash fertiliser could jump by 20 to 30 per cent in the next few months.
The cost of urea fertiliser has already increased three-fold in the past year while potash fertiliser prices are also expected to rise.
While the price of grains and oil seeds has been increasing, adding value to Australian crops, farmers are facing huge fuel price hikes shortly ahead of the season’s main grain-planting window.
Diesel costs have increased to between $2.10 and $2.40 a litre this week.
“Diesel is a huge energy source for on-farm use, tractors, generators, you name it diesel is the main energy source for farmers,” Mr Salardini said.