250,000 Tonne Urea Shipment Takes Pressure Off Australian Farmers

The Deal

The federal government has brokered a commercial agreement for 250,000 tonnes of agricultural grade urea to be shipped from Indonesia to Australia, covering about 20 per cent of the fertiliser farmers still need for the current season.

The agreement is between Australian supplier Incitec Pivot Fertilisers and Indonesian state producer PT Pupuk Indonesia. It was announced by Prime Minister Anthony Albanese on 17 April 2026.

“This is a significant outcome for our farmers. We understand how critical fertiliser is,” Albanese said.

Why It Matters

Urea prices have jumped from about $850 a tonne in late February to around $1,400 a tonne by mid-March, according to Grain Central. Half of Australia’s vegetable growers reported their fertiliser supplies would run out within three weeks, Hancock Agriculture reported.

Incitec Pivot president Scott Bowman said the Indonesian volume was “another critical element in servicing Australian farmer needs” and would “go a long way to shoring up critical supplies to Australian farmers”.

Agriculture Minister Julie Collins said she had been “working day and night with industry” to get fertiliser to farmers. “This guarantees supply of fertiliser to Australian farmers at this critical time,” she said.

The Bigger Problem

About 60 per cent of Australia’s urea imports travel through the Strait of Hormuz, which has been disrupted by the war in Iran. Australia produces little urea domestically and relies almost entirely on imports.

National Farmers Federation president Hamish McIntyre warned that without reliable and affordable inputs, “farmers will scale back plantings”. Many growers have already switched from nitrogen hungry crops such as wheat and canola to feed barley.

What’s Next

The Indonesian shipment does not cover the remaining 80 per cent of the shortfall, and is not expected to ease the high prices farmers are now paying. A domestic urea plant being built by Perdaman on the Burrup Peninsula in Western Australia is not due to start production until mid-2027.

Foreign Affairs Minister Penny Wong said Australia was “working with international partners to strengthen shared energy and food security”. The government has also set up a Fertiliser Supply Working Group and passed legislation to underwrite fuel and fertiliser purchases.