Albanese offers Brunei food for fertiliser, fuel as farmers stop planting

Australia is leveraging its food exports to secure critical supplies of fuel and fertiliser from Brunei as farmers warn that soaring costs and fuel shortages may stop half the country’s growers from planting crops this season.

Prime Minister Anthony Albanese signed a joint statement with Sultan of Brunei Hassanal Bolkiah on Wednesday, in which both nations committed to maintaining open trade of critical exports. Australia is a major exporter of food to Asia, and Brunei supplies more than 10 per cent of Australia’s diesel and fertiliser.

Albanese visited a fertiliser plant, where he said there was potential for Brunei to increase its exports to Australia.

“This underscores our commitment to ensuring that essential goods continue to flow between our countries ... by building regional co-operation on energy security and economic resilience, we strengthen our fuel security,” Albanese said in Brunei.

Since the US war with Iran began on February 28, shipping through the Strait of Hormuz has dwindled to almost nothing after missile attacks and blockades, choking off a major global source of both fertiliser and oil.

Foreign Minister Penny Wong, speaking alongside Albanese, said the joint statement released by the sultan and the prime minister showed Brunei recognised the value of Australia’s food supply.

Australia exports around 70 per cent of the food it grows, and nearly half of that goes to Asian nations.

“The statement that was signed today reflects that willingness to work with each other on our shared security, on energy security, on food security, the recognition that the urea and diesel that we seek we import from Brunei, and that we continue to seek, comes back to the region as food that is very well understood here,” Wong said.

Australian farmers’ confidence has been smashed by unprecedented price pressures, with a doubling of fertiliser and diesel costs since the war began almost seven weeks ago.

The National Farmers Federation said that based on what it had heard from producers across the country, half of all farmers might not plant a winter crop this season.

“Fifty per cent are saying that they are actively considering not planting because they can’t see any way through,” said NFF chief executive Mike Guerin.

NSW Farmers vice president Rebecca Reardon, who runs a cropping and livestock farm at Moree in north-west NSW, said the price of fertiliser was critical to farmers staying in business.

“Fuel hurts, but fuel is probably more about availability. Fertiliser is just killing the bottom line for us,” Reardon said. “We have to apply it or we don’t get the yield, and that kills our profitability.”

Urea is the most common fertiliser used by farmers growing wheat, barley and canola, which comprises about 90 per cent of the winter crops grown in the country.

In the middle of the winter planting window, the Iran war has sent the price of urea up to $1700 a tonne – double last year’s prices. If urea costs too much, the earnings from the crop will not cover the costs, including fuel and seeds.

“It is incredibly difficult for regional communities, it’s not just the primary producers. It flows through to all the small businesses in town, the truckers, the processors, people that get that food from farm to plate, all of those suffer,” Guerin said. “And then, of course, food security, more broadly.”

Albanese last week cut a deal with Singapore, where the city state offered assurances about Australia’s fuel supply in exchange for a commitment to continue sending them liquid natural gas.

After Brunei, Albanese will on Thursday head to Malaysia, whose oil refineries supply about 10 per cent of Australia’s diesel and petrol.

Energy Minister Chris Bowen said on Wednesday that the government had made progress with its scheme to urgently boost fuel imports.

In this scheme, taxpayers guarantee fuel companies’ losses if they bought expensive shipments before sudden oil price falls in an increasingly volatile market.

Bowen said there were “well-advanced discussions” between the government and the nation’s major fuel importers, Ampol and Viva, to buy extra shipments to bring to Australia.

He also announced that two smaller fuel importers that focus on regional supply chains, IOR and Park Fuels, had agreed to participate in the scheme.

Efforts to reduce localised petrol and diesel shortages, driven by panic buying, were working, he said.
In NSW on Wednesday there were 84 service stations without diesel, which is 3.5 per cent of the state’s total and 25 fewer than late last week. Seventeen had no fuel at all.

In Victoria, 18 were without diesel, which is down 16 compared to last week. There were 11 with no unleaded petrol.

In Queensland 33 had no diesel and 20 no regular unleaded.