Australia will continue to receive essential fertiliser and urea supplies from Indonesia, even as a critical shortage driven by the Middle East crisis threatens crop production and food security. This commitment was confirmed by Rahmad Pribadi, head of Indonesia's state-owned fertiliser manufacturer Pupuk Indonesia, during discussions with Australia's ambassador in Jakarta, Rod Brazier.
Shared Responsibility for Food Security
In an interview with The Australian, Mr Pribadi emphasised that food security is a mutual obligation due to deeply interconnected supply chains. He stated, 'It is in Indonesia's interests for Australia to remain a strong agricultural producer and exporter because Indonesia is also dependent on Australia for certain commodities. We are very connected.'
He further highlighted the strategic importance of the partnership, noting, 'I said Australia is one of our key markets and also a friendly state. In times like these, we need friends. We definitely know in the next two months Australia will be in need of fertiliser for wheat planting. I am very sure certain quantities of fertiliser will go to Australia.'
Supply Details and Global Context
Annually, Australia imports between 300,000 and 700,000 tonnes of urea from Indonesia. This assurance comes at a crucial time, as China halted fertiliser shipments in March, instructing exporters to stop outgoing loads of urea and urea-ammonium nitrate (UAN) to protect its domestic market and food supply. China, one of the largest global exporters of these minerals, shipped over $13 billion worth last year.
The nutrients are vital for Australian farmers to enhance plant growth and crop yields, and their absence could severely impact food supplies. Mr Pribadi added, 'We know the needs of Australian farmers. Indonesia needs to function as a stabiliser to friendly countries, and not let speculators take control.'
Indonesia's Role as a Reliable Supplier
Mr Pribadi made it clear that Indonesia aims to be a dependable source, stating, 'We would like to make clear, not just to Australia but to the world that we will be a reliable supplier and not let fertiliser be used as a political tool.' This stance is particularly significant amid geopolitical tensions affecting global trade routes.
Industry and Government Responses
In response to China's export halt, Perth-based conglomerate Wesfarmers dispatched representatives from its chemical manufacturing company CSBP to China. CSBP general manager Ryan Lamp told The Australian, 'We haven't let them (Chinese suppliers) off the hook. We expect them to explain to us what mitigating factors they're taking to meet their obligations, and to provide clarity on the mitigating actions.'
Mr Lamp noted that they are collaborating with industry bodies and the federal government to restore access to Chinese supplies and improve the supply chain. Additionally, the farming sector has reportedly considered importing ammonium nitrate from Russia, though this would require the federal government to ease trade restrictions.
Impact of Middle East Crisis
The ongoing conflict in the Middle East has exacerbated supply issues, with Iran effectively closing the Strait of Hormuz, a key passageway for global shipments including oil and fertiliser. According to Fertilizer Australia, more than 60% of urea blends imported into Australia travel through this strait.
Fertilizer Australia CEO Stephen Annells said on March 25, 'We are aware there are shipments stranded and cancellations of future shipments in the Persian Gulf. Fertilizer Australia member companies are actively seeking to access increased quantities of urea from other manufacturing and supply regions, as well as sourcing alternative nitrogen products for farmers. We cannot guarantee these efforts will fully meet the needs of farmers in the medium term.'
Government Engagement
A spokesperson for the Department of Foreign Affairs and Trade confirmed that the government is 'engaging directly with trading partners' on fertiliser access, underscoring the importance of diplomatic efforts to secure agricultural inputs during this global shortage.
