Friday, 29 March 2024 08:55

Well-placed to weather conflicts

Written by  Sudesh Kissun
Shipping disruption caused by Houthi rebels in the Red Sea has so far not impacted fertiliser prices or supply on farm. Shipping disruption caused by Houthi rebels in the Red Sea has so far not impacted fertiliser prices or supply on farm.

Shipping disruption caused by Houthi rebels in the Red Sea has so far not impacted fertiliser prices or supply on farm.

While both major fertiliser co-operatives, Ballance Agri Nutrients and Ravensdown have enough fertiliser on hand to meet demand, an escalation of the conflict through Middle East may however change things.

The first ship to be sunk by the rebels since the conflict started is the MV Rubymar, which was carrying 21,000 tonnes of ammonium phosphate sulphate fertiliser.

Ballance head of customer Jason Minkhorst told Rural News that while the sinking of MV Rubymar didn’t directly impact its supply chain, it’s indeed a tragic event.

“The only products that Ballance sources to be impacted by these attacks is NPK (nitrogen, phosphorous and potassium), which we source from Europe and can come through the impacted shipping lanes.

“These shipments will take a longer route to avoid the area resulting in a freight increase, but these costs have not been passed on to our customers.”

Minkhorst says the current geopolitical environment and extreme weather events continues to cause instability in fertiliser prices – including the conflict in the Ukraine, tensions in the South China Sea and other parts of the Middle East that are vital to fertiliser production.

“At Ballance, we have a diversified supply chain that allows us to mitigate these disruptions when it occurs. Having local manufacture of nitrogen and phosphate also helps provide supply security.

“Lower incomes, higher interest rates and increased operating costs are driving demand on-farm. However, we are currently seeing fertiliser prices below what they have been at recent peaks, which is good news for farmers,” he says.

Ravensdown, which doesn’t use the Red Sea and Suez Cana route to bring in fertiliser, says the ongoing dispute has impacted vessel rates.

However, so far, there has been little impact on fertiliser supply and availability, according to chief operating officer Mike Whitty.

“The Red Sea situation remains a risk and, like other importers, we are monitoring the situation carefully,” Whitty told Rural News.

He points out that fertiliser prices have largely been unaffected, as the market is influenced by seasonal demand and supply factors.

“From a bulk shipping perspective, we do not use the Suez Canal and Red Sea route.

“However, recent missile attacks combined with the drought in the Panama Canal have contributed to longer shipping routes, decreased capacity and increased demand globally, which means more shipping days are required.

“This has contributed to a firming of vessel rates.”

Whitty warns that any escalation will continue to put pressure on the timing and availability of shipping, with containers particularly likely to be impacted.

More like this

Fert prices drop

Both major fertiliser co-operatives have dropped their prices as farmers start planning for spring.

Fert use tumbles as prices spike

Fertiliser use in New Zealand over the 18 months is about 25% down from what it consistently was for the previous decade or more, says Ravensdown chief operating officer Mike Whitty.

Shipping crisis deepens

The shipping crisis caused by Houthi rebel attacks in the Red Sea and problems with a lack of water in the Panama Canal appears to be deepening by the day.

Featured

Farmers back ACT MP's bill

ACT MP and Northland dairy farmer Mark Cameron is lodging a new member’s bill that would prevent regional and district councils from regulating greenhouse gas emissions.

Calls for more support for vets, nurses

The animal health sector needs to change to keep up with the times, according to the discussion at a breakfast event hosted by Boehringer Ingelheim at the NZ Vet Association and NZ Veterinary Nursing Association conference in Christchurch recently.

National

Govt unveils climate strategy

The Government has launched its new Climate Strategy, which it says is a comprehensive and ambitious plan to reduce the…

Machinery & Products

More efficient jumbo wagons

In a move that will be welcomed by many, Austrian manufacturer Pottinger appears to be following a trend of bringing…

Fieldays' top young innovator

Growing up on a South Waikato sheep and beef farm, Penny Ranger has firsthand experience on the day-to-day challenges.

Claas completes 500,000th machine

Claas is celebrating half a million combine harvesters built since 1936, marking the occasion by building anniversary machines from the…

Donated tractors welcome news

When Cyclone Gabrielle hit in February 2023, it left an estimated $13.5 billion worth of damage across New Zealand.

» Latest Print Issues Online

The Hound

Fieldays focused

OPINION: Your old mate had a wee crack at Fieldays recently for the perception it was more focused on quantity…

'Woke madness'

OPINION: Real estate agent Janet Dickson's court case, following her refusal to complete a compulsory Māori culture course, is being watched…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter