Australia's urea imports over January-August surpassed record-high levels in the whole of 2023, GTT data show, because of exceptional grain output and favourable weather conditions.
Urea imports into Australia reached 3.35mn t in the first eight months of the year, already breaking the previous record high of 3.18mn t of imports in the whole of 2023 (see graph). Urea imports were notably at 768,800t in June, up by 66pc compared to the same month of 2023 when 463,200t was imported.
Market participants have attributed the large increase to exceptional grain output across Australia, especially in New South Wales and Queensland, which has been supported by favourable rainfall. One urea importer noted imports could have been higher last year but many farmers put off their urea purchases, because of an El Nino forecast which failed to materialise, and this slowed imports.
Saudi Arabia has been Australia's largest supplier so far this year at 597,000t, followed by the UAE, Indonesia, Qatar, Oman and Malaysia with 571,400t, 539,200t, 497,300t, 493,500t and 309,600t respectively.
Imports from Indonesia have been notably much higher this year, more than tripling from 172,900t in the whole of 2023. But imports from China dropped significantly from 118,000t to just 17,000t on the back of export controls.
Australian urea imports typically peak in the middle of the year before trailing off until January and then picking up again. Australia imported 625,200t of urea from September to the end of the year in 2023. Assuming imports stay at that level or are surpassed, as has been the case for most months this year, total imports could reach 4mn t, double the 1.99mn t of urea imported in 2019.
Australia became entirely dependent on imports for urea in December 2022 after fertilisers and chemicals producer Incitec Pivot (IPL) shut down its Gibson Island fertiliser plant in Brisbane, Queensland.
Market participants expect urea imports to remain strong until Australian fertilizer producer Perdaman's A$6bn ($4bn) urea project at Burrup Peninsula, Karratha Western Australia project is completed. Construction of the project started in late April and is expected start producing around 2.3mn t/yr of urea in 2026. The plant has a 20-year agreement with Woodside's Scarborough Gas Project to utilise its natural gas as feedstock while the plant also has a 20-year urea offtake agreement with IPL, with urea expected to be marketed to domestic and international export destinations.
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