A Performance Analysis of the Australian Nitrogen Fertiliser Value Chain

Abstract

<p>Australia's nitrogen fertiliser value chain accomplishes its core goal of supplying a wide range of fertiliser products to end users. There has been a shift over the last 40 years towards increasing reliance on imports over domestic production and, for most of that time, excepting the constraints of 2021-2022 coinciding with high demand, supply has not been an issue. The degree and range of competition by suppliers along the value chain varies. Since trade liberalisation, competition at the raw material end of the value chain has increased as the nitrogen fertiliser market has become increasingly contestable. The retail end of the value chain has a large number of participants in both national and local markets, but distribution and white labelling activities are concentrated within a few firms in the two regional domestic markets. Despite earlier recommendations from the Australian Parliament and the Australian Competition and Consumer Commission, price transparency continues to be an issue. Compared to other highly developed nations, Australian agriculture uses relatively little nitrogen fertiliser per hectare and total use is a tiny proportion of the global nitrogen market. Problems of pollution from nitrogen fertiliser used in agriculture are markedly less acute than elsewhere in the world, which also means that the adoption of enhanced efficiency fertilisers is correspondingly low.</p>