SYDNEY, (Australia): Prices of Australian exports of staples such as beef, wheat and barley are predicted to increase by 20 per cent due to disruptions to fertiliser and fuel supplies, in a development that could trigger rises in food prices across Asia.
Price hikes and shortages in fuel and fertiliser caused by the conflict in the Middle East have forced farmers in Australia to reduce crop sizes or avoid planting.
Australia exports about 70 per cent of its agricultural products, mostly to Asia. The top importers of Australian meat and produce are China, Japan, the US, Indonesia and South Korea.
To grow its crops, it imports about 65 per cent of urea, a fertiliser, from the Middle East. It also imports about 90 per cent of its fuel, much of which is refined in Asia and originates in the Middle East.
Hamish McIntyre, head of the National Farmers’ Federation, an organisation that represents the nation’s farming sector, told The Straits Times that prices of Australia’s main agricultural exports – such as beef, wheat and barley – could increase by 20 per cent to 30 per cent due to fuel and fertiliser disruptions.
He said the price rises were likely to be part of global price hikes that would be felt by the end of the year as output declines and as buyers pay more to ensure farmers keep up supplies in the face of rising costs.
“We have farmers who are making the difficult decision not to plant crops,” he said.
“They can’t be sure customers will pay any more, so it is safer to do nothing and stay fallow until you can be sure how to make a profit. (Or) they can’t get hold of urea and starter fertiliser and are choosing not to plant.”
One of the world’s biggest food suppliers, Australia exported more than A$16 billion (S$14.5 billion) worth of beef in 2025; the largest buyers were the US, China, Japan and South Korea, with Singapore the 14th-largest buyer.
Exports of wheat – Australia’s second-largest food export after beef – were worth about A$9 billion; the largest buyers were China, Indonesia, the Philippines, Yemen and Japan.
Australia is by far the biggest foreign supplier of Singapore’s wheat, accounting in some years for more than half of its imports.
Singapore is also a major buyer of Australian vegetable oil, dairy products, fruit and seafood, with total purchases of Australian agricultural products amounting to more than AUS$1.4 billion in the year to June 30, 2025.
The price of urea in Australia has increased amid the war in Iran from about A$800 a tonne to about A$1,800 a tonne.
The price of diesel, which is used for machinery and freight, has increased from about A$1.70 a litre to A$2.65 a litre, though prices in recent weeks have been as high as A$3.40 a litre.
The federal government has been trying to secure fertiliser supplies, including by helping to underwrite purchases by fertiliser firms.
In early April, Australian Prime Minister Anthony Albanese visited Singapore, Brunei and Malaysia to discuss efforts to cooperate on ensuring stable regional flows of fuel, fertiliser and gas.
Mr Albanese assured Singapore Prime Minister Lawrence Wong that Australia would continue supplying it with liquefied natural gas (LNG). PM Wong said Singapore would continue supplying refined fuels to Australia.
They also agreed to cooperate on ensuring the flows of essential supplies through efficient border and port processes, transparency and early consultation.
Canberra and Jakarta also helped secure a recent deal between Australia’s Incitec Pivot Fertilisers and PT Pupuk Indonesia to provide an extra 250,000 tonnes of urea for Australian farmers.
Confidence to plant
On April 23, Albanese, when asked about warnings by farmers that Australia’s domestic grocery prices could increase by 20 per cent, said there would be an impact on prices, but the extent of any increase was “uncertain”.
“What we know is that there will be an impact,” he told The Daily Aus news outlet. “What we are trying to do is to limit and restrict the impact that is there.”
He added: “We want farmers to have the confidence to be able to plant and use the fertiliser.”
Products that use large amounts of fertiliser are expected to be worst affected, including wheat, barley, oats and canola. Supplies of some vegetables, including broccoli, cauliflower, cabbage and capsicum, are also set to be affected.
Michael Coote, head of AUSVEG, which represents Australia’s vegetable growers, told ST that surges of fuel and fertiliser costs and concerns about access to supplies were causing “widespread uncertainty”.
He said the sector had not yet experienced price hikes, and future export prices were difficult to predict as the international market for vegetables was “highly competitive and highly price-sensitive”.
“The vegetable industry is very different from more homogenised sectors like beef or grains, because vegetable growers produce a much wider array of crops, grown in different conditions across a large continent,” he said.
“As impacts are still flowing through and playing out differently for growers… it’s challenging to provide crop-specific forecasts for specific vegetables.”
Higher fuel costs are also expected to affect products dependent on freight, such as milk and other dairy products, which could result in domestic price hikes of 20 per cent.
Growing winter crop may be unprofitable
A survey of farmers in April by the Victorian Farmers Federation, which represents the state’s farmers, found that farmers expect their output to decline by 30 per cent due to the current disruptions.
The federation’s president, Brett Hosking, told The Sydney Morning Herald: “What I’m certain will happen is we’ll see less food produced globally this year.”
The National Farmers’ Federation’s McIntyre, who has a grain and beef farm in the state of Queensland, said some grain farmers may switch to products such as chickpeas and lentils, which require less fertiliser.
He said the worst affected were grain farmers who had not pre-purchased fertiliser and were now facing steep prices, which meant growing a winter crop would be unprofitable.
Ultimately, however, the upheavals in supply will leave no one unaffected.
“Everyone is worried about receiving enough (revenue) for their food and fertiliser to cover their costs,” McIntyre added. - The Straits Times/ANN
