Skyrocketing fertiliser prices will further inflate grocery costs

Industry figures have warned a devastating price rise affecting farmers will soon be passed on to supermarket shoppers.

Industry experts have warned shoppers to prepare for even higher grocery bills as a result of skyrocketing fertiliser prices affecting Aussie farmers.

Data obtained from Thomas Elders Markets showed the cost of sending fertiliser to Australia in April 2022 was $1251 per tonne compared with $533 per tonne in May 2021.

Grain farmers have also warned the increased pressure on upkeep could lead to lower yields at the next harvest.

“The high cost of fertiliser is having a really big impact,” GrainGrowers Chairman Brett Hosking said via Channel 9.

The global impact of Russia’s invasion of Ukraine is also being felt in Australia, with supply chains across the world being disrupted by trade sanctions to generate what industry figures are describing as a “perfect storm”.

“Together with the supply chain problems in China – which produces much of the world‘s fertiliser – and now Ukraine, Ukrainian war, it’s been a perfect storm,” Hosking said.

Higher fertiliser prices mean growers are taking on great risks in recovering the costs of producing food.

“The stakes and risk profile of the growers become a whole lot higher,” Hosking continued, warning grain farmers will “reach a point of diminishing return” in yields of wheat, barley, oats, canola and other grains.

Coles and Woolworths’ suppliers are hitting up the major retailers for multiple price rises, which could see the cost of products on shelves increase by a whopping 12 per cent this year, new research has revealed.

Shoppers in the US and UK are already being battered by huge price increases and Aussies are about to experience the same as the cost of living skyrocketed to a 22-year high.

Ben Gilbert, retail analyst at investment bank Jarden, warned price rises at supermarkets are “coming now and are large”.

A survey of 45 suppliers from Jarden found they were seeking a price rise of up to 6.8 per cent each year on average on their products, with 66 per cent already pushing the increase through, while 20 per cent were still in negotiations.

“Price increases are significantly larger than we expected,” Mr Gilbert said in his survey of key retail suppliers.

In more bad news for Australians, Mr Gilbert said special sales or promotions would likely drop.

“Despite retailers and suppliers actively pulling promotions through January, reflecting supply chain issues, not all suppliers are able to concurrently or are planning to reduce promotions,” he said.

Fruits and vegetables are set to be among the items most impacted by price rises with some grocery manufacturers facing up to 700 per cent cost increases.

Some groceries at Australia’s major supermarkets have already risen up to a whopping 94 per cent in the past year, data released last month revealed.

Coles has already been forced to jack up prices on a range of everyday items and warned shoppers there could be more price pain in the months ahead.

The $25 billion retail conglomerate said it increased prices by an average 3.3 per cent over the March quarter to pass on the inflated cost of shipping, fuel, meat, and fresh vegetables, but Coles chief executive Steve Cain said costs could climb further in the months ahead.


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