China export tax set to send fertiliser prices soaring
Thursday, 01/05/2008
The latest National Australia Bank agribusiness survey shows a skewed picture in rural Australia, with farmers feeling better about the future, but agribusiness not so sure.
A facade of confidence is emerging as world commodity prices stay high, masking the pain being felt from rising input costs, such as fertiliser, fuel and chemicals.
The situation hasn't been helped by a decision from China to impose a 100 per cent tariff on exports of fertiliser.
Former head of the Australian Fertiliser Services Association, Shane Dellavedova, says while Australia has some carry-over stocks following several poor seasons, farmers need to get ready for a big price rise.
"Using the figures that I saw come through over the weekend, we'd be in the vicinity of a retail high of the $800 bracket, which is approximately $200 dearer than the current market, or the market we've been used to in the last three months."
Rural analyst and director of Market Ag, Mark Martin, says farmers are relying on bumper crops to stay insulated from soaring costs, and that's a very risky proposition.
"What the farmer really needs at the end of the day is yield, and so they've been able to keep abreast of the increased costs by growing more bales per acre," he said.
"But they need the heavens to open for them to get a good crop, otherwise they are going to be facing the sting of increased input costs.
