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

Agnition announces new online sales channel

Ravensdown’s venture arm, Agnition, has announced a new online sales platform in an effort to give Kiwis more choices for how they purchase fertiliser and other agricultural products.

Featured

Fruit fly discovery 'concerning'

Horticulture New Zealand (HortNZ) says that discovery of a male Oriental fruit fly on Auckland’s North Shore is a cause for concern for growers.

Fonterra updates earnings

Fonterra says its earnings for the 2025 financial year are anticipated to be in the upper half of its previously forecast earnings range of 40-60 cents per share.

Nedap NZ launch

Livestock management tech company Nedap has launched Nedap New Zealand.

National

FE survey underway

Beef + Lamb NZ wants farmers to complete a survey that will shed light on the financial toll of facial…

Top dairy CEO quits

Arguably one of the country's top dairy company's chief executives, Richard Wyeth has abruptly quit Chinese owned Westland Milk Products…

Machinery & Products

New home for JCB Agriculture

Power Farming has announced a new chapter in its partnership with JCB, which having represented the UK-based company’s construction equipment…

CAT's 100th anniversary

While instantly recognised as the major player in construction equipment, Caterpillar Inc, more commonly known as CAT, has its roots…

» Latest Print Issues Online

The Hound

Ruth reckons

OPINION: Ruth Richardson, architect of the 1991 ‘Mother of all Budgets’ and the economic reforms dubbed ‘Ruthanasia’, added her two…

Veg, no meat?

OPINION: Why do vegans and others opposed to eating meat try to convince others that a plant based diet is…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter