Investor News
The Fertiliser Cost Spiral: Volatility & Vulnerability
Australian farmers are no strangers to risk: drought, floods, and shifting market conditions. But over the past three years, one factor has emerged as an increasingly critical threat to both productivity and profitability: Fertiliser prices.
The cost of urea and other nitrogen-based fertilisers has surged, driven by global disruptions, energy price shocks, and geopolitical instability. In a nation that imports over 90% of its urea, this exposure poses a direct challenge to our food security and economic resilience.
A Perfect Storm of Global Factors
In 2021–2022, global urea prices more than doubled. Several drivers converged:
- Gas price spikes in Europe and Asia (urea is gas-intensive to produce)
- Export restrictions from major suppliers like China and Russia
- Shipping and logistics disruptions post-COVID
- Conflict in Ukraine, affecting ammonia supply and market sentiment
The result? Massive input cost increases for Australian farmers, often with little notice and few alternatives.
Australia’s Import Dependence
Australia lacks significant domestic nitrogen fertiliser manufacturing. Instead, we rely on:
- Refined urea imports, mostly from East and Southeast Asia
- A highly concentrated supply chain, vulnerable to international politics
- Foreign exchange risk, amplifying volatility
In 2023 alone, Australia imported more than 2 million tonnes of nitrogen fertiliser. This dependence means:
- Limited pricing power
- Little control over availability
- Reduced resilience in crisis scenarios
“If even one shipping route is blocked, carriers stop coming. Insurance is voided. Supply halts.”
— Australian energy security analyst (2024)
The Impact on Farmers
For farmers, the implications are stark:
- Margins shrink when fertiliser costs surge unexpectedly
- Risk planning becomes harder, with input prices disconnected from crop markets
- Yield decisions suffer, as growers cut back or delay applications
This cost spiral is not just inconvenient, it’s unsustainable.
Is There a Smarter Way Forward?
Yes. And it starts with smarter fertiliser.
The Zero Quest joint venture is developing COLDry Fertiliser, an Australian-made, carbon-smart alternative that:
- Uses locally sourced lignite to carry nitrogen,
- Avoids high-temperature processing (which consumes energy and releases emissions),
- Can be produced and distributed domestically, improving supply resilience.
Efficiency = Cost Savings
COLDry Fertiliser delivers more usable nitrogen per tonne. In independent trials, lignite-urea blends have shown:
- 59% less nitrogen leaching
- 64% less emissions losses
- 21% more plant nitrogen uptake
- 23% yield improvement
That means less fertiliser waste, more effective application, and higher returns per dollar spent.
Why It Works Economically
The value proposition is simple:
- Lower cost than conventional urea
- Lower nitrogen loss = less fertiliser needed
- Domestic production = more stable pricing
- Soil health benefits = longer-term productivity gains
It’s not just about cutting emissions. It’s about improving cost control and reducing reliance on foreign suppliers.
A More Secure Agricultural Future
By scaling production of COLDry Fertiliser, we can:
- Create regional jobs
- Build resilient supply chains
- Strengthen national food security
- Protect farmers from global shocks
It’s not just a better fertiliser. It’s a strategic shift for Australian agriculture.
Learn More
Want to understand how COLDry Fertiliser can improve your yield and reduce your fertiliser bill?
Email: [email protected]
References
- DAFF fertiliser import stats: link
- World Bank Agricultural Input Market Analysis
- Chart