THE FEDERAL Government has announced it will partner with CSBP and Incitec Pivot to underwrite fertiliser shipments into Australia.

These agreements are similar to those struck with fuel companies Ampol and Viva Energy earlier this month.

Under the Strategic Reserve powers finalised in March, Export Finance Australia will back overseas fertiliser and fuel purchases, enabling the government to work with companies to lock in shipments and get supplies into the country faster.

CSBP, owned by ASX-listed Wesfarmers, operates in Western Australia, while Incitec Pivot, a Ridley subsidiary, runs a fertiliser supply chain in Australia’s other states.

Minister for Agriculture, Fisheries and Forestry Julie Collins said the government will now work with CSBP and Incitec Pivot to proceed to document all details required so they can secure shipments.

“We understand how critical fertiliser is for Australian farmers, for our food production system and the food security of our region,” Ms Collins said.

“That’s why I have been working day and night with industry to support getting fertiliser to Australian farmers.

“This is a significant outcome for our farmers and will support industry to secure and deliver the fertiliser we need sooner.

“Our government will continue working with our farmers to help manage the global impacts of the conflict in the Middle East.”

Minister for Industry and Innovation and Minister for Science Tim Ayres said the new laws will give suppliers confidence to secure cargoes enabling fuel and fertiliser to get to farmers and communities that need it most.

“By working closely with industry and Export Finance Australia, we’re helping ensure more fertiliser reaches farmers,” Mr Ayres said.

“This approach backs Australian farmers through the current global disruption by reducing the risks associated with extreme price volatility.

“A secure fertiliser supply underpins farm productivity, Australia’s food security, and our capacity to support our region.”

Shortfall persists

Speaking on ABC’s RN program on Thursday, Ms Collins acknowledged fertiliser supplies had not yet returned to normal levels.

“The 250,000 tonnes that we managed to secure with Indonesia last week we estimate is about 20 percent of the shortfall of fertiliser required in Australia for the current season.

“We certainly have enough fertiliser in Australia or on the water on its way to Australia already for the initial planting season, so this is about further down the season and making sure that we have those supplies.”

She said the government was working with industry via the Fertiliser Working Group to secure supplies from outside the Middle East as the Strait of Hormuz remains effectively closed.

“We certainly have a shortfall…in terms of future months.

“What we have been doing is working with the industry through our Fertiliser Working Group to secure fertiliser from other parts across the globe.”

NFF response

National Farmers Federation president Hamish McIntyre welcomed the announcement and said it showed what could be achieved when industry and government worked together.

“This outcome reflects the government acting on the concerns we’ve been raising directly on behalf of farmers,” Mr McIntyre said.

“Coupled with last week’s announcement securing 250,000 tonnes of urea, it will help restore some confidence heading into the season.

“But we are still a long way from being out of the woods.

“Despite this news, farmers and regional businesses are still under real pressure, facing tight supply, rising costs and tough decisions.

“As National Cabinet meets this week, we need continued action to shore up supply, an agriculture-specific plan and targeted support for those facing circumstances no business could reasonably prepare for.”

CSBP update

The development comes as CSBP updates growers on its efforts to secure sufficient fertiliser supplies for the coming months.

In its Market Update published to YouTube on Friday, CSBP Fertilisers sales strategy and reliability manager Ben Sudlow said it has three ships on the water or being unloaded with urea or granular ammonium suphate.

He said securing the shipments had enabled the company to scale back its force majeure declaration on some grower contracts.

“We have been successful in the last couple of weeks in securing more urea and some more granular ammonium sulphate,” Mr Sudlow said.

“So right now we have a ship of urea unloading around the coast at the moment; we have a ship that’s sailing and heading to the coast now of urea; and we’ve also got a ship that’s now unloading granular ammonium sulphate.

“That volume of product has been part of the reason that we’ve been able to offer, successfully, the alternative nitrogen supply.”

Mr Sudlow also provided an update on urea prices, which spiked late last week after India issued a tender for 2.5 million tonnes of imports.

He said such tenders typically push prices higher, with values “accelerating” by US$100-$120 per tonne.

He said the industry was seeing prices in-excess of those experienced when Russia invaded Ukraine.

“Urea prices in that period got up to around A$1450/t retail.

“We’ve probably seen prices now AUD$100-$150/t more than what we saw in that time which goes to show the price intensity of the price acceleration that we’ve seen in the past two weeks.”