Indonesia to supply 250,000 tonnes of urea for Australian farmers
The Albanian government has said it is holding the last 20 per cent of the fertilizer Australian farmers need this season following a deal with Indonesia, as war in the Middle East continues to disrupt world supply routes.
About 250,000 tonnes of urea, the world’s most used nitrogen fertiliser, will be delivered as part of a deal signed on Thursday between NSW-based Incitec Pivot Fertilizers and Indonesian PT Pupuk Indonesia.
The agreement was supported by both the Australian and Indonesian governments and will cover farmers’ remaining fertilizer needs for the November 2025-October 2026 season.
Anthony Albanese said the deal was a “significant outcome” for Australian growers.
“We understand how critical fertilizer is to Australian farmers, our food production system and the food security of our region,” he said.
“This agreement also shows why it is critical that we have strong relationships with our regional partners.”
The de facto closure of the Strait of Hormuz after the US and Israel attacked Iran on February 28 caused shock waves in the global energy market.
But fertilizer was also affected; Approximately 30 percent of global nitrogen and phosphate fertilizer trade passed through the strait.
Agriculture Minister Julie Collins said she was “working around the clock with industry to support the delivery of fertilizer to Australian farmers”.
“I am very grateful for the cooperation and support of the Indonesian government in finalizing this,” he said.
“This ensures the supply of fertilizer to Australian farmers at this critical time.
“This will mean that at a time of global uncertainty, Australia can continue to play an important role in supporting food security in Indonesia and our region.”
The announcement came at the end of Mr Albanese’s two multi-day overseas trips to the region, most recently to Malaysia.
Malaysia and Australia have agreed to deepen cooperation, including production and irrigation expertise, to ensure sustainable food supplies, the country’s Prime Minister Anwar Ibrahim said on Thursday.
“No one should mislead the gravity of the contract we signed today,” he said.
“Such deals directly impact people’s lives as supply chains are disrupted and food prices rise and rise.
“The distance between a signed contract and a family’s dinner table is shorter than most people imagine.”
Mr Albanese said Australian resources “help power our region and our farmers help feed it”.
“Almost 60 percent of Malaysia’s wheat and 75 percent of its lamb and beef come from Australia,” he said.
“Our neighbors know that providing fuel and fertilizer to Australia helps put food on the table in this region.
“We rely on each other for fuels, including crude oil and natural gas, and Malaysian urea contributes to Malaysia’s food security by helping Australia grow crops such as the wheat we supply here.”
Mr Albanese said a partnership had also been agreed on red meat processing and trading.
Speaking about the fertilizer deal, Incitec Pivot Limited chairman Scott Bowman said the additional volume at prevailing market prices for the May-December period was “another critical plan in meeting the needs of Australian farmers”.
“While there is more work to be done to ensure farmers’ needs can be fully met next season, this additional volume will go a long way in providing critical supplies to Australian farmers,” he said.
