CBH Fertiliser business right as grain as it ‘explores options’ in Albany Port Zone

CBH is eyeing building a fertiliser storage facility in Albany as it tries to snare 15 per cent of the State’s highly-competitive fertiliser market within the next 10 years.

The grain marketer and handler’s CBH Fertiliser business has gone from strength to strength since it was launched in 2015, with the business opening a $59 million storage facility at Kwinana last month.

It also has fertiliser storage facilities at Geraldton and Esperance, which opened in 2016 and 2022 respectively.

CBH Fertiliser head David Pritchard said the opening of the Esperance facility had garnered “great support” from farmers, with almost 30,000 tonnes sold from the facility in the past year. Geraldton is able to hold about 15,000 tonnes of granular fertiliser.

“It shows that they were happy for us to turn up and provide competition,” he said.

“Albany is the one area we don’t have any coverage in at the moment.

“While there aren’t any concrete plans, we are exploring options in that space.

“We are missing a physical presence (in Albany)... we are looking there, but it will take some time.”

CBH Group has a goal of holding 15 per cent market share in WA’s highly competitive fertiliser marketplace by 2033.

It currently represents about 200,000 tonnes of the total market, which is about 10 per cent.

Mr Pritchard said the company was likely to reach that goal earlier than 2033.

But he said it hinged on its ability to add more import and storage capacity.

The opening of CBH’s Kwinana Fertiliser Facility last month was hailed a significant step towards that goal, with the ability to store 55,000 tonnes of granular product and 32,000t of liquid urea ammonium nitrate.

The grain juggernaut received its first shipment of liquid fertiliser in history this month, marking its first move in the sector which represents about 25 per cent of the State’s fertiliser market.

“By adding liquids in... I think we can get to that 15 per cent (target) in the next five or six years,” Mr Pritchard said.

“We are really striving towards our 15 per cent market share strategy.”

Mr Pritchard said most of the existing growth had happened “organically”.

“We have never had capacity to do unlimited tonnes, so we have allowed customers to come to us,” he said.

“We have attempted 40 per cent growth every year, which tells us we are doing something right.”

CBH chair Simon Stead said he believed the the fertiliser business had helped push prices down for farmers.

“It has provided another competitor in the market and created competitive tension,” he said.

“That has led the market down... and the efficiencies we gain through this project, we pass savings on to growers.”

Liquid fertiliser imported from Kwinana is expected to be trucked up to 400km from the Port, with one or two vessels carrying about 25,000t each expected to arrive at the Kwinana Grain Terminal each year.

Up to seven vessels of granular fertiliser are expected to be imported through Fremantle Port each year — some of which will travel to via Geraldton and Esperance.

Most of CBH Fertiliser’s liquid imports would come from the US and Trinidad, while granular urea from Oman, Kuwait, Indonesia, Malaysia and Brunei; phosphates and potash come from Jordan and Egypt, and phosphates from China and Morocco.

Fertiliser prices have been a hot topic after skyrocketing during the past two years on the back of the China’s restrictions on phosphate exports and the Russia-Ukraine war, sparking concern from farmers.

The price of wheat has not kept pace with the price of urea, leaving Australia’s import-dominated fertiliser market open to risk and farmers’ experiencing pain at the hip pocket.

Prices have fallen about 25 per cent from last year’s peak but are are still well above the long-term average.

Mr Pritchard said prices hadn’t come off as much as “what growers would like”, but were trending downwards.

“My view is they will continue to fall for the rest of the year and be cheaper for the 2024 season,” he said.

“Nitrogen has halved since October and November last year... and so has urea.”