Plant closure creates supply concerns

Direct Farm Inputs' Leighton Huxtable said fertiliser prices had risen dramatically in the past month.

Mr Huxtable, who farms at Borrika in the Mallee, said there were a number of reasons for the price rise.

"There's the currency being lower, but that's not everything, the international price of fertiliser has also strengthened," he said.

Mr Huxtable said one of the world's major plants producing fertiliser - located in South America - had also gone into liquidation.

"That has caused a scare," he said. "I think there's been a bit of panic buying because of supply concerns."

Mr Huxtable said early buyers of fertiliser had been rewarded.

"There were some good prices earlier on and there were a lot of farmers and wholesalers that took advantage of those," he said.

"A lot of the trade ran out of those supplies and had to price replacement stock, and found that it was a lot higher in cost."

Mr Huxtable said currency was a major factor in the price rise.

"Currency and the fact that the international market has risen quite substantially makes it a lot higher," he said.

"The Australian dollar is at about US80, but earlier on the price was at US95c. That's a 15c difference, which equates to about $70 a tonne.

"With MAP and DAP, there's not much about for less than $740/t. Before Christmas it was selling for about $660/t."

Mr Huxtable said supply should not be an issue at the moment.

"At this stage I think most trade companies are pretty sure that they will have supply fairly well covered," he said.

"There are ships that if they're not hitting Australia at the moment, then they're close, so supply is not a real issue.

"But I think a major plant going out of production may make a difference in relation to supply later on."