Source: Radio New Zealand
A farmer with a farm fuel tank. SUPPLIED/LEVNO
Australasian bosses across agriculture, aviation and freight sectors are in the ear of their government officials in dealing with the chaotic global supply chain.
The government announced on Tuesday it secured an initial agreement with Z Energy to procure an additional 90 million litres of diesel for Aotearoa, as key shipping routes in the Middle East remained blockaded.
Through late March and April, the Australian federal government secured hundreds of millions of litres of diesel from markets like Singapore and Malaysia, as well as locking in fertiliser deals covering 250,000 tonnes of urea from Indonesia, and supply commitments from Brunei.
It also introduced various tax relief packages on fuel excise and heavy vehicle user charges, and underwrote imports of fuel and fertiliser.
Finance minister Nicola Willis met with Australian Treasurer Jim Chalmers last week, followed by a large roundtable meeting with Australasian bosses of industries exposed to supply chain disruptions, like agriculture.
Featured was Australia’s peak farming industry body, the National Farmers’ Federation.
Chief executive Mike Guerin said he applauded his federal government for its response after the beginning of the war in late February, and welcomed more collaboration with New Zealand.
He said Australia went “hard and early”, such as with the underwriting of fuel imports.
“That’s an example where Australia went very early, and New Zealand’s done something similar, but perhaps not quite as well as Australia has.”
New Zealand-born Guerin said both countries shared challenges around fuel and fertiliser shocks.
Australia’s National Farmers’ Federation chief executive Mike Guerin during the online meeting with Australian and New Zealand industry and officials on fuel and fertiliser situation. SUPPLIED/NATIONAL FARMERS’ FEDERATION
“Both countries have very little fuel supply onshore, but neither country has much processing capacity left to process and refine oils, for example, into finished product. The same broadly applies to fertiliser.”
But he said there was good discussion at the meeting about possibly sharing infrastructure in the longer term, including linking up vessel schedules.
“We could see lots of things we could do for each other, and they’re very willing to do so.”
- How have fuel and fertiliser challenges affected your farm? Let us know monique.steele@rnz.co.nz
Guerin said while no actions were firmly agreed to during the initial conversation, there were options tabled for manufacturing and storage.
“Rather than each of us working away, an issue which is difficult given our lack of scale in global terms, if we work together, there could be enormous value in that,” he said.
“Save some money, save some costs and give us both more confidence in storage and processing and manufacturing, and those big inputs to agriculture, because as we know, in both countries, for generations we’ve been able to take food security for granted.”
He said it was all about protecting food security and building a supply chain for Australasia together to deal with the immediate and longer term issues ahead.
Finance Minister
Nicola Willis and Christopher Luxon announcing fuel support. Samuel Rillstone/RNZ
New Zealand’s Finance Minister Nicola Willis said close co-operation between New Zealand and Australia made sense, particularly to share information on fuel markets, shipping movements, supply chain risks and resilience options.
She said it was a valuable opportunity to gain feedback from across agriculture, freight, aviation, retail and energy sectors about the impact of higher costs and supply uncertainty, when considering our own planning and response options.
“Industry engagement helps ensure decisions reflect operational realities and the needs of key sectors such as food production, freight and emergency services. And more detail of phases 3 and 4 will be announced next week,” she said.
She said both countries were facing similar supply challenges.
“We have also amended fuel specifications to better align with Australia, helping ensure New Zealand can access supply headed into the same regional market,” she said.
“Alongside that, the Government is progressing practical regulatory changes identified by industry to improve fuel efficiency and resilience, including freight and transport settings.”
Earlier advice on fertiliser supply from key New Zealand-based supplier Ravensdown was that the country had sufficient fertiliser supply through to mid-August.
Willis said the Government was in regular contact with the fertiliser industry and monitored international supply chains closely, while Australia’s recent arrangement focused on securing winter supply.
“As a food-producing country, we [New Zealand] remain connected to major suppliers and producers, and ready to act to any emerging pressure points,” she said.
“Farmers and growers are critical to New Zealand’s economy. We know higher fuel and input costs create pressure, which is why our focus remains on targeted, timely and practical measures that support supply continuity, strengthen resilience and keep the economy moving.”
Willis described the situation on Wednesday’s Morning Report as “the worst oil supply shock in history.”
The latest Ministry of Business Innovation and Employment fuel supply statistics lifted, showing of Sunday, the country had 52 days of petrol, 46 days of diesel and 49 days of jet fuel either in country or on its way.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
