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2026-05-27 17:25:31
[Strait Crisis Impacts Australian Farms, Costs Soar by 60%, Price Transmission to Grains and Oils is Only a Matter of Time] ⑴ The supply disruption in the Strait of Hormuz has led to a significant increase in fertilizer and fuel prices, severely squeezing the profit margins of Australian farms. Dennis Voznesenski, an agricultural and sustainable development economist at CommBank, points out that over 40% of the world's urea, approximately 15% of its phosphate, and about 40% of its sulfur are blocked behind the strait, posing a major threat to Australian agriculture, which relies heavily on imported fertilizers. ⑵ Even if the strait reopens quickly, fertilizer shipments to Australia will still take 3 to 4 weeks. The next one to two weeks will be a critical window; if the strait becomes open, fertilizers are expected to arrive around mid-July, just in time for the crucial winter crop fertilization period. Currently, farm input costs have increased by 20% to 60%, while wheat, barley, and rapeseed prices have only increased by 13%, 15%, and 8% respectively. Revenue growth is far less than the increase in costs, significantly compressing profit margins. (3) Faced with high fertilizer costs and uncertainty, some farms have begun to adjust their planting strategies: reducing the planting area of wheat, which requires high nitrogen, and instead increasing the planting area of forage barley and legumes to fix nitrogen. Other farmers are reducing crop planting or postponing fertilization, but this may come at the cost of yield and quality. Voznesenski warned that if fertilizers are not available by July or prices do not fall, the market will realize the real production problems, at which point commodity prices will be impacted, and this will ultimately be transmitted to food prices.
