An Incitec Pivot presentation in north-west Tasmania last year. Photo: Incitec Pivot Fertilisers

INCITEC Pivot says urea coming from Indonesia and other origins beyond the Persian Gulf, as well as sulphate of ammonia and phosphates from a range of sources, is boosting the amount of fertiliser available to Australian growers in the near term.

This is in the face of tightened world supplies as the result of conflict which has throttled the export of fertiliser from the Persian Gulf since war broke out in late February.

In a stakeholder update released on Monday, Incitec Pivot, now part of the ASX-listed Ridley Corporation, said  it has two urea cargoes waiting to exit the Strait of Hormuz.

“In addition, other cargoes due to load from the region have been cancelled or deferred,” the Incitec Pivot statement said.

Australia traditionally secures around 60 percent of its urea from the Middle East, and Incitec Pivot said countries in other regions have reacted to the tightened supply by restricting exports of fertiliser products.

“We have responded proactively to source replacement urea cargoes and substitute products, albeit at elevated procurement prices.

“This has proven to be the right decision, partially mitigating most but not all supply risks.”

Incitec Pivot is a volume supplier of fertiliser in eastern and South Australia, and is expected to make an entry in Western Australia through its arrangement with Perdaman.

While two WA fertiliser suppliers have called force majeure due to the Middle East conflict, companies like Incitec Pivot operating in other states have not.

“Incitec Pivot operates with the intent to contract product when we have sufficient confidence we can deliver on our obligations.

“As a result, sales contracting has been carried out to align as closely as possible to available volumes and only expanded to match the timing and value of replacement cargoes.

“This approach has resulted in Incitec Pivot being able to maintain contracting over much of the period, with certain times of pause.

“Key actions taken by Incitec Pivot have enabled an increased confidence for supply into the May-June period, which is typically the peak demand period as growers require nitrogen in the winter-cropping regions.”

The company is encouraging dealers and growers to continue contracting where product is available.

“While forward stocks are available as per above, fertiliser supplies in this May-June period are expected to remain tight.

“Customers should expect some product outages at various times in some port facilities as we await the arrival of the replacement cargoes.

“Customers are encouraged to consider requirements for the next 3-6 months and secure their needs as products are available.”

Across the segments

Incitect Pivot’s urea supply got a major boost through the arrangement it came to with PT Pupuk Indonesia, as supported by the Australian and Indonesian governments.

It will supply up to 250,000 tonnes of urea for this year, with the first cargo expected to arrive in Australia in the first half of June.

With regard to Sulphate of Ammonia, formulated by Incitec Pivot into Gran-Am, shipments from China have been ongoing, including increased short-term supply since the initial outbreak of the war.

“In these circumstances, Gran-Am can also be blended with existing urea to make nitrogen go further.”

Monoammonium and diammonium phosphates are key fertilisers for planting winter crop, and Incitec Pivot said they continue to be supplied to the Australian market.

Phosphate volume is coming from both Phosphate Hill, the facility in north-west Queensland formerly owned by Incitec Pivot, and global suppliers.

Ammonium phosphates continue to be supplied into the market.

Incitec Pivot has been able to maintain current supply of Urea Ammonium Nitrate, which the company markets as EASY N, as it seeks additional shipments.

The company’s Easy Liquids business manufactures locally and “is working hard to meet regional requirements”, and is currently making more N25, with 25pc nitrogen, available.

“We are focused on doing everything possible to assist our customers through this period, deploying a broad range of initiatives to help close the gap on supply; however, there is more work to be done.”

Given increased fertiliser prices and availability uncertainty, Incitec Pivot is providing education and information on options for growers to consider alternative fertiliser products, blends and formats.

That includes enhanced efficiency fertilisers which can reduce nitrogen volatilisation in winter cropping by up to 82pc.

Incitec Pivot is hosting a series of webinars for agronomists and growers, with this season’s first held earlier this month and aimed at southern cropping.

Entitled Nitrogen management strategies in a challenging supply environment, it had more than 250 registered viewers.

Upcoming webinars are scheduled as follows:

• Friday, April 24: Nitrogen management in northern cropping;
• Friday, May 1: Fertiliser management in dairy; and,
• Friday, May 8: Fertiliser management in beef and sheep pastures.

Source: Incitec Pivot Fertilisers