South Korea has reached an agreement with Indonesia to receive around 120,000 tons of urea per year over the next three years.
David Leaney, an International Supply Chain Management lecturer at Australian National University, says Indonesia would be a great match for Australia for the same reasons it was a great match for South Korea.
“We’ve got pretty good trade relations with Indonesia and since they’re one of the world’s biggest suppliers (of urea), it’s a good opportunity to see what we can do in terms of bilateral or multilateral trade arrangements,” he told news.com.au.
“We’ve got good trade relationships with South Korea as well.”
Other big manufacturers of urea include India, Russia, Indonesia, Pakistan and the US. But Mr Leaney says because urea is a cheap commodity for its volume, the closeness of Indonesia has huge appeal.
“What you don’t want is transporting cheap stuff using expensive transport a long way because then transport becomes too higher percentage of the total price you’re paying,” he said.
“We probably wouldn’t buy our urea from Russia, even thought it’s one of the world’s biggest producers, because it’s just too far.”
On Tuesday, concerned industry groups called for a federal task force to address potential AdBlue shortages.
