Lead Times

There is lead time involved in shipping fertilizers from overseas suppliers to Australia which can cause problems of oversupply or undersupply if actual demand varies from forecasts made by the importers.

Typically orders are placed at least three months ahead and in busy times it may be difficult to obtain product or charter a vessel on shorter notice. Loading a ship takes from three to five days and then there is travel time as summarized in the table below.

As with all major traded commodities, domestic prices are determined by the international price, the cost of shipping, storing and handling and the exchange rate.

Due to the lead times from origin to Australia, combined with the effect of inventory and the seasonal demand pattern, the rate at which international price changes are reflected in the Australian market varies considerably and is primarily driven by competition between the various manufacturers and importers.

As domestic production competes with imported product, or could be sold on the world market at international traded prices the international market largely determines the Australian domestic price for both imported and locally manufactured fertilizers.

 

Region  Main Products  Typical Travel Time 
(Days)
North America - West Coast  Potash  23 
US Gulf  MAP DAP   45
Arab Gulf  Urea  24 
North Africa  MAP DAP Phosphate Rock   34
China  MAP DAP Phosphate Rock  20 
Malaysia  Urea 18