Hope you're all keeping well and things are looking good out there in the paddock. What a difference a month makes, hey? While most of us have finally seen that opening rain – or some decent follow-up falls – we're still thinking of those of you in Northern SA, including the Upper Eyre, Upper Mid North, and the Riverland, who are having a pretty brutal start. Let's hope these weather patterns have genuinely shifted and we see more consistent rain without too much of that dreaded wind. Beyond the paddocks, there's been a fair bit of activity on the world stage that's having a direct impact on your bottom line, particularly with chemicals and fertilisers. We'll dive into that now. Fertiliser Prices: Urea Takes a Leap The saying a week in fertiliser is a long time has never been truer… If you've been watching the news, or just checking prices, you'll have noticed urea has jumped over $100/tonne in the last fortnight. The biggest driver here is the escalating geopolitical tension in the Middle East, specifically those recent strikes between Israel and Iran. Clearly tensions between Israel and Iran have pushed global urea prices sharply higher (USD100 tonne). Production in both Iran (all Urea & Ammonia plants stopped producing) and Egypt (gas supplies from Isreal ceased) removing more than 20% of the global supply. Neither country is currently offering any new shipments to the market. Here's the breakdown: Supply Hit Hard: When things flared up, we saw Egyptian and Iranian urea production halt swiftly. Both those countries are significant players in the urea market, so that's a big chunk of supply taken offline. On top of that, Israeli gas flows stopped, which directly impacts Iranian urea production, as natural gas is a key ingredient. Buyers Rushing In: Less supply means higher prices, and we've seen a bit of a scramble from buyers, including here in Australia, trying to lock in supplies before prices climb any further. Add in some favourable planting conditions in places like North and South America, boosting seasonal demand, and you've got a perfect storm for prices to shoot up. Figure 1. Urea Granular FOB Middle East Futures Price Trend (Source: Investing.com AU, 2025) Other Background Factors: Don't forget that China has been restricting its fertiliser exports to prioritise their own domestic needs, which keeps global supply tighter. Additionally, the volatility in natural gas prices, a major cost for urea production, has been an ongoing issue. So, while the Middle East conflict is the immediate trigger for this latest jump, these other factors have been simmering away in the background, making the market pretty sensitive to any major shocks. In addition to this, India recently held a tender to buy 1.5 million tonnes of urea but managed to secure just 229,000 as the deadline came at the start of the escalation. India have come back to the market again looking for 2 million tonnes with loading/shipment required by 22nd August putting more pressure on supply short-term. After prices locally treaded water and eased slightly through May and early June we have seen them rise sharply on the back of the middle east issues. Supply for prompt collection is an issue with any new cargoes now arriving August creating some challenges for growers with crops out the ground requiting product. Looking ahead over the next 30 to 60 days, prices are expected to stay firm or move higher. There’s no clear timeline for production to resume in Iran or Egypt, and ongoing political tensions are likely to keep the pressure on global prices. Please ensure you talk to your Crop Smart sales rep and discuss your fertiliser requirements to enable us to work through these for you and get plans in place. Agricultural Chemicals Feeling the Squeeze The impact of these global events isn't just on fertiliser; it's also pushing up the price of agricultural chemicals, especially those coming out of China. You see, China is a massive producer and exporter of your everyday ag chemicals. When oil prices surge due to Middle East instability – as we've seen with the recent actions impacting oil supply (chart below) – it directly translates to higher production and transportation costs for those Chinese manufacturers. We've been saying for a few months now that the Chinese have been operating on pretty tight margins, and they've been waiting for an event like this to justify increasing their prices. Figure 2. WTI Oil Price Trend (Source: Business Insider, 2025) We've literally seen a 20 cents per litre increase in China for glyphosate and paraquat in the last week alone. Our two biggest commodities have clearly bounced off their bottom from a fortnight ago. This means you've got a small window now to secure stock in Australia that was purchased at those lower prices before new stock, bought at these elevated rates, starts landing on our shores this coming summer. On the post-emergent herbicide front, supply is looking pretty good across the country. We've previously flagged the all-time low price of Clethodim and the upcoming price rises for that, so hopefully, you've taken our advice and locked in your orders. MCPA is also presenting as a great buy at historically low prices. With all the dry sowing many of you have done, we're expecting strong demand for all in-crop herbicides as soon as those recent rains really get things germinating. Global Shipping: Adding to the Bill And finally, a quick word on shipping. Those ongoing disruptions in the Red Sea and Suez Canal are forcing cargo ships to take the long way around Africa's Cape of Good Hope. This isn't just an inconvenience; it significantly increases transit times and fuel consumption, leading to much higher ocean freight rates for anything coming out of China, including your ag chemicals. It all adds up to a bigger bill landing on your farm gate. In summary There's a fair bit going on in the world right now, and it's certainly impacting the cost of your farm inputs. Our job here at Crop Smart is to make sure you're covered and kept in the loop. As things can change quickly, we're continuously offering customised advice to ensure your farm inputs are sorted for the season. Our three suggested actions would be: Order your clethodim & MCPA now, Make sure you have a clear plan for your urea/SOA supply, If you need any more glyphosate and paraquat order now. If you're not getting the right information or support from your current supplier, please don't hesitate to get in touch with one of the team – we're here to help you stay organised. As always, we truly appreciate your support. Thanks for shopping with one of the few Aussie independents left! References Investing.com AU. (2025) Urea Granular FOB Middle East Futures Price. Available at: https://au.investing.com/commodities/urea-granular-fob-middle-east-futures (Accessed: 25 June 2025) Business Insider. (2025.) Oil price: WTI Crude Oil prices and charts. Available at: https://markets.businessinsider.com/commodities/oil-price?type=wti (Accessed: 25 June 2025).