Australia fertilizer imports rise but challenges remain

Australia's fertilizer imports increased in January-September, but falling domestic sales amid a drought in parts of the country point to challenges ahead.

Australia's imports of most leading fertilizers increased during the first nine months of this year, despite a continuing severe drought in New South Wales (NSW) and Queensland that has cut into agricultural production.

Urea imports totalled 1.95mn t in January-September, up by 29pc from the same period last year, according to GTT data.

Qatar/Muntajat led suppliers with 542,000t, down by 8pc year on year. Saudi Arabia's Sabic almost doubled its shipments to 438,000t over the period, while Chinese deliveries rose from 62,000t to 257,000t.

MAP imports totalled 802,000t in the nine-month period, up by 7pc year on year. China led suppliers at 420,000t, up 29pc. Saudi supplies rose by 19pc to 186,000t. But the US lost share, with its supplies dropping by 39pc to 154,000t, reflecting a rise in shipments from the Ma'aden, Sabic and Mosaic Saudi joint venture MWSPC.

MOP imports totalled 412,000t, up by 4pc from January-September 2018, suggesting last year's record imports of 506,000t may be exceeded. Canada and US remained the leading suppliers, with shipments increasing to 171,000t and 134,000t respectively over the period.

One exception to the rising trend was NPKs. Imports of the product totalled 101,000t in January-September, down by 12pc year on year. South Korea led suppliers at 34,000t, largely unchanged from the same period last year. Jordanian shipments fell sharply to 9,000t from 22,000t over the period.

But the general rise in imports does not tell the whole story, with domestic fertilizer sales in the country's July 2018 to June 2019 financial year presenting a different picture. Sales rose in South Australia and Western Australia, but there were notable falls in the drought-affected states of NSW and Queensland.

Total fertilizer sales in NSW fell by 23pc over the period to 1.03mn t, while Queensland sales fell by 39pc to 615,000t, according to updated figures from Fertilizer Australia.

Sales of some fertilizer products rose, but sales of urea — the most widely used product — fell by 5pc to 1.84mn t across Australia. Total fertilizer product sales fell to 5.9mn t from 6.5mn t a year earlier.

Rainfall readings at Forbes in NSW show a deficit to the 10-year average for nearly all of 2019. Only 0.2mm fell in April, down from the average of 24.62mm, according to Speedwell data. And rainfall was 7.2mm in September, below the average of 31.96mm.

Only 139.2mm of rain has fallen in Stanthorpe, Queensland in the whole of January-September.

Farmer cash flow will be reduced by the drought and this will inevitably affect reinvestment in fertilizers going forward.

Australia is one of the world's leading exporters of wheat and a significant producer of cotton and other crops.