AUSTRALIAN farmers can expect to pay more for fertiliser and farm chemicals next year but not as much as when prices spiked in 2008.
Rabobank's latest Global Focus report has forecast higher farm input prices in response to better commodity returns as the global economy picks up.``In 2010, as the global economy gathers momentum and agricultural commodity prices shift higher, farm input demand will increase,'' the report said.
``With increased farm input demand, especially from emerging countries, it is expected that some logistical constraint in both the gobal and local supply chains over the next six months will occur and place upward pressure on farm input prices.
``That said, the increased investment in farm input production capacity should prevent a repeat of the 2008 price spikes.''
Rabobank said the Fertiliser Industry Federation of Australia had estimated that local farmers had cut their fertiliser use by 25 per cent during 2009 from that used two years earlier when confidence in the cropping sector was at its highest level.
``At current commodity prices, in particular Australian wheat prices, it is unlikely that fertiliser consumption will return to 2007 levels in the short term,'' it said.
Rabobank said an expectation that El Nino conditions would persist in Australia through the first part of 2010 might prompt farmers to defer purchases of farm inputs right up until sowing time.
It said any last minute rush of fertiliser and chemicals could put pressure on supplies, driving prices higher.
