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 Fert demand catches suppliers off-guard 

Fert demand catches suppliers off-guard

15 Jan, 2010 08:30 AM
CHEMICAL and fertiliser stocks at some of Australia's largest suppliers are dwindling due to the twin impacts of the high Aussie dollar on the cost of imports and recent flood rain across northern NSW and parts of Queensland.

The heavy rain has sparked a flurry of weed activity across large swathes of the two States during the past few weeks and prices - which have been relatively low - are set to rise.

Ospray business manager, Alex McCorquodale, Sydney, said the high Australian dollar during the past few months had put off many chemical companies from importing fertilisers from China.

"People have probably not been importing as much as they have needed because the dollar is high," she said.

"Ourselves and a few other companies are struggling to fill orders. Prices have been low for the past few months but they are going up again."

Last week a Rabobank report found limited availability of farm input stocks could cause a spike in agricultural chemical and fertiliser prices as seasonal demand picks up.

The study suggested manufacturers cut production and retail supplies ran down inventories due to weaker-than-expected demand from Australian farmers.

However, heavy rain throughout large parts of the eastern States has rapidly increased demand, catching manufacturers out.

Nufarm national marketing manager, Paul White, said its distribution network, and that of other chemical companies, had been caught out.

"Due to the unseasonable summer rain, demand has been pushed higher than usual," he said.

While Nufarm accelerates production of fertilisers and herbicides in Australia, it may not be enough to halt any potential price rises.

NSW Farmers Association grains committee chairman, Mark Hoskinson, said farmers needed to think ahead when planning finances, and factor in any potential price rises.

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A high Aussie dollar should mean imports of fertiliser or their components and chemicals should be cheaper. Farmers get less Aussie dollars for their exports in US dollars, but should be paying less for imports. Tractor manufacturers have been passing on some of the currency benefits, because they are highly competitive, but not fertiliser and chemical companies.....because the ACCC allowed mergers which took the competition out of those markets. This is a competition issue, not a high Aussie dollar issue.
Posted by farmland, 18/01/2010 7:45:53 AM, on Queensland Country Life
I'm with you Farmland. Why is it that because our $ is high, we are not importing??????? I would have thought it would be the best time to import and give us farmers the chance to get product at a reasonable price? Oh, hang on a bit, we are talking about fertiliser companies and we know what their track record is like. Bet that if the $ drops 10c, they will up the price and blame the increase cost of importing.
Posted by The orchardist, 18/01/2010 3:14:24 PM, on Queensland Country Life

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