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Rabobank semi-annual global fertiliser outlook: The quest for recovering lost demand

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Rabobank Australia, Media Release, 29 April 2024

A recent Rabobank report highlights a complex scenario for the global fertiliser market – fertiliser costs are down, but so are commodity prices, squeezing farmers’ margins. Demand for certain fertilisers, such as phosphates, is experiencing a downturn. Still, the overall use of fertilisers is projected to rise in 2024, but at a reduced pace.

Globally, operating costs for farmers, especially for fertilisers, are returning to pre-Ukraine war levels, while at the same time commodity prices are falling. This combination has led to a squeeze on operating margins, which are now below the average of the past two years, making farmers more cautious about investing in their farms.

“Despite these headwinds, the fertiliser sector is showing resilience. Geopolitical factors, among other issues, could present further obstacles, yet the growth in fertiliser use is anticipated to persist,” says report lead author Bruno Fonseca, Senior Analyst – Farm Inputs at Rabobank.


For Australia, the report says, an overall reduction in demand for fertiliser is expected for the upcoming season – marking a departure from the recent trend, which had seen fertiliser application rate increasing.

RaboResearch analyst Vitor Pistoia said the bank expected a total “nutrient reduction” of approximately seven per cent for the season ahead, driven by a decrease in nitrogen application and a similar drop in phosphate fertilisers.

The report said in the two years to 2022, farmers’ crop management programs had focused on the application of nitrogen, the nutrient with the highest correlation to potential yields and the “fastest payback”. During this period, nitrogen demand had expanded 25 per cent, with phosphorus only seeing a three per cent increase, while, at the same time, the Australian winter cropping area – which represents the sector with the largest fertiliser usage – grew by 21 per cent.

“The outlook for the 2024/25 season, however, is more challenging,” Mr Pistoia said, with comparatively lower grain and oilseed prices prompting a change in crop rotation programs and lower fertiliser application. Added to that, the report said, there is a “precarious soil moisture scenario”, with large swathes of the western wheatbelt having notably low soil moisture levels.

Despite these challenges, there are “some tailwinds supporting fertiliser demand” in Australia, the report said, with other commodities also contributing to the demand outlook. These included beef, where prices were rebounding, and dairy, which was going through a positive demand cycle.

“Cotton and sugarcane prices also remain favourable and crop conditions look promising,” Mr Pistoia said, “while vineyards could see a surge in demand following China’s decision to remove tariffs on Australian wine.”


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