Around half of the growers in South Australia (SA) are using less fertilizer this season on the back of very dry weather conditions, according to a seeding intentions survey by Grain Producers South Australia (GPSA).
The survey also showed seeding has been delayed, with 64pc of growers saying they had not started seeding by Anzac Day on 25 April, historically seen as the benchmark to have seeding completed or at least started.
Urea imports into South Australia were 329,091t last year, according to data from the Australian Bureau of Statistics, breaching 300,000t for the first time since records began. Urea imports in the first quarter of this year were 54,220t, slightly lower than the same period of last year. Most of South Australia's urea imports occur in the second quarter of each year, with 201,763t arriving in that period last year.
Projections from the Australian Bureau of Meteorology (BoM) show there is less than a 50pc chance of above-average rainfall in most regions of Australia in May-June. South and Western Australia have been particularly dry this season.
"Growers are taking a conservative approach to fertilizer," said GPSA chief executive Brad Perry. A grain producer commented in the survey that "not only is the season tough but there is no let up on input costs either."
A similar situation is unfolding in the state of Victoria, where the market remains slow and growers are concerned about getting seeds in the ground. Market participants said the lack of rainfall could impact top-dressing urea application and lower demand across the state by 5-20pc. Buy and sell side indications for local granular urea prices have diverged since the start of May, and transactions have become limited. Granular urea was last assessed at A$765-780/t fca Geelong (see graph). The BoM is forecasting rainfall across southeastern Victoria, most of South Australia and the southeastern coast in June, which should boost demand for urea and prices.
By Susannah Cornford and Tom Woodlock
