N.Z. urea to face imported competition

Press, 2 July 1986, Page 3

N.Z. urea to face imported competition

New Zealand may soon be importing urea at the same time that its sole producer, Petrocorp, is exporting it Farmlands Grain, formerly known as the South Island Barley Society, is about to begin importing small quantities of the fertiliser for some of its 2000 co-operative members and any other farmers who are not happy with the price they are paying for urea from Petrocorp.

Petrocorp’s reaction to the threat of competition is simple, according to the general manager of Petrocorp’s gas and products division, Mr Peter Davenport, of Wellington. "You Import and we will just continue exporting, because we can get as much by exporting as by selling locally.”

He said that farmers should realise that urea from Petrocorp was of a very fine quality. Petrocorp’s product is selling about $445 a tonne anywhere in New Zealand. Farmlands Grain hopes to sell urea to

farmers for less than $350 a tonne, according to its general manager, Mr Graeme Robertson, of Methven.

Mr Davenport said that the difference in the prices could be explained in terms of costs arising after the product left the urea plant. These included mark-ups and freight charges. For Farmland’s Grain, Mr Robertson said that the co-operative was preselling the product, which it hoped to import from the Far East, South-East Asia, or Europe. The transaction would take place through the international commodities markets, by telex.

He said no definite selling price to farmers could be given yet because of the volatility of the exchange rates. He agreed that Petrocorp’s urea was “probably the best in the world,” but in his view quality was “worth only so much” and that the important thing was the consistency of the nitrogen content Farmlands Grain had

not set any target quantity which it would import Instead, it would pre-sell, then bring in shiploads to satisfy orders, probably bringing about 3800 tonnes a time.