Australian farmers can expect a volatile global fertiliser market in the year ahead, according to a Rabobank report
Rabobank’s Semi-annual Global Fertiliser Outlook report expects that 2025 fertiliser prices will be unpredictable, with Australian farmers depending on other countries for their supply due to a lack of local manufacturing.
Report co-author, RaboResearch agriculture analyst Paul Joules, says the three most used fertilisers by Australian farmers – nitrogen, phosphates and potash – have all seen prices ease from the highs recorded in 2022, following the outbreak of the Russia-Ukraine war.
“Fertiliser prices have been going up by escalator but coming down via the stairs in terms of the pace of the price correction,” he says.
“International supply and demand issues have a direct impact on Australian fertiliser prices and ability to procure fertiliser.
“As a relatively small player in the global buyer market, Australia is not in a position to dictate prices,” he says.
From an Australian purchasing perspective, Joules expects a positive outlook for the Australian dollar.
Rabobank is predicting that the exchange rate between the Australian dollar and US dollar to rise to US72c to A$1 over the next 12 months. If this comes to fruition, Joules says it will make fertiliser purchases more affordable.
“The strength of the Australian dollar and waning global demand point towards lower prices for Australian farmers,” he says.
“However, ongoing global supply-side issues for nitrogen and phosphate fertilisers will likely limit downside potential.”
Phosphate and potash usage rates are strongly correlated to price, Joules adds.
“It’s important to remember that this is happening against a backdrop of declining grain and oilseed prices, high interest rates and high machinery costs in Australia. Negative sentiment surrounding these pressures could impact fertiliser application decisions,” he says.
In terms of nitrogen prices, the Rabobank report states there is no clear direction. This could lead to potential overactions in prices of urea, either in an upward or downward trend, the report says.
“We should continue to expect price volatility, a common pattern in the nitrogen market,” Joules says.