Fertiliser imports almost back to normal post-Covid

After fighting with televisions for container space on ships during the worst of the pandemic, the timeline for fertiliser imports by sea freight is almost back to normal and prices for most products have softened.

Campbells Fertilisers National Sales and Marketing Manager Scott Matthews congratulated those growers who heeded his warnings at last year’s Market Outlook Forum and ordered ahead.

“It was a good decision because there were supply disruptions and there were a lot of price changes,” he said.

“We predicted it would peak because of the global factors … but not how high it would peak.

“Between January to September 2022 alone, globally there was nearly a 200 per cent increase in price across all fertiliser.”

Those global factors included disruption at several parts of the supply chain – fertiliser manufacturing, supply and sea freight – as well as changing levels of demand, a spike in gas prices to 350 per cent above the monthly average, and the impact of COVID-19 and geopolitical factors, such as the war in Ukraine and restrictions on fertiliser exports from China.

“To keep this in perspective, although to us the Australian fertiliser market is extremely important, we are just 1-3 per cent of the global fertiliser market,” he said.

Scott said there were still extended delays in shipments travelling via Malaysia and Singapore, but the cost of sea freight had fallen dramatically.

The Australian Quarantine and Inspection Service also had helped remove a major bottleneck in Australian ports by converting to a single inspection process for containers.

“We’re saying now, if it takes three months, it will actually get here in three months rather than three to six months,” he said.

After a difficult 12 months, Scott said the outlook for this year was much more positive, although some of the factors affecting fertiliser supply and pricing were still quite volatile, with changes in foreign exchange rates and within the Chinese economy in recent weeks.

Demand from third world countries had declined dramatically and widespread extreme weather events in Australia “literally dampened demand across the East Coast”.

“The general message is pricing has reduced from the peak,” he said.

“But it’s likely to stay above the long term averages for at least the first half of this year.”

Scott described 2021 as the year of “just in time so when you needed it, it was there” for both importers and growers, and said the 2022 theme was “I’ve got to have that just in case” because of the gloomy outlook.

While supply, sea freight, exchange rates and retail pricing were rated uncertain, volatile or poor last year, they were now considered improving, good or almost normal.

Scott said the outlook for 2023 was actually pretty good news.

“Be prepared for still a little bit of volatility on one line or another but things are looking far more optimistic,” he said.

“But improved supply doesn’t mean guaranteed supply.”