Crisis ‘more terrifying than any Covid headline’: China ban threatens national standstill

Months after China banned exports of one key commodity, Australia is now staring down the barrel of a national standstill.

The head of Australia’s peak trucking association has taken aim at China for leaving truckies “swinging” as the industry anxiously awaits government intervention.

Australia’s trucking industry is at risk of being ground to a halt if it cannot source enough urea. The anti-pollution additive, in the form of a diesel exhaust fluid called AdBlue, is required to make diesel vehicles run.

Urea, a naturally occurring chemical component, is also a key component in fertiliser.

While the trucking industry is confident it has enough to last through Christmas, if more urea cannot be sourced by early February there is a major risk that the supply chain will be adversely affected and consumer prices impacted.

Until earlier this year, about 80 per cent of Australia’s urea had been imported from China.

Without enough urea to produce AdBlue, Australian trucks will not be able to commercially operate.

Australian Trucking Association chair David Smith said China’s ban on urea exports, which came into effect a few months ago, had caught Australia “off guard”.

AdBlue, which is required to make trucks run, is in extremely short supply. Picture: NCA NewsWire / Andrew Henshaw

“They wanted to retain their urea themselves to hold the price of urea in China … to make it cheaper for their farmers,” Mr Smith told RN Breakfast.

“(But they) left Australia swinging, basically.”

As a result, the price of urea has gone up more than 400 per cent since January, and the price of AdBlue has more than doubled in the last two months.

Trade Minister Dan Tehan said on Monday that China’s ban on urea exports had shown that Australia needed to “firm up supply chains ourselves”.

“What it clearly shows is that the pandemic has demonstrated that some supply chains are fragile,” he said.

Trade Minister Dan Tehan said China’s ban on urea exports was a sign Australia needed to firm up supply chains itself. Picture: NCA NewsWire / Nicole Cleary

Queensland cattle farmer Matt Ferguson-Tait took to TikTok earlier this week to plead for help and explain the damage that would happen without urea.

“If we run out of urea, not only will we not be able to grow cattle, we will not be able to grow food, we will not be able to grow grain or anything like that, but even if we could, we can’t move it because we can’t turn a wheel in a truck because we have no AdBlue,” he said.

“As of February we might not have a truck on the road in Australia, we might not have a train on the track in Australia – quite literally, the whole country comes to a standstill as of February.

“It’s more terrifying than any Covid headline, I can tell you.”

Until earlier this year, China accounted for 80 per cent of Australia’s urea supply, which is necessary to agriculture as well as to keeping trucks on the road.

It’s a problem not just contained to Australia, Mr Smith said, with no one country other than China having enormous supplies of urea.

“The federal government will be able to source (eventually), but it might be spread over half a dozen countries,” he said.

“I am worried … But we have some faith someone will be able to secure some urea from overseas.

“I’d like to be optimistic. We’re pretty right to get through to Christmas, but then into February things will really tighten up.

“I’d like to think some supply is introduced before early February.”

Mr Smith said if a solution was not found by then, the consumer prices of many everyday items would rise.

Mr Tehan said he was approaching “key overseas markets” to get urea stocks back into Australia.

“I’ve spoken to my Indonesian counterpart, there is some supply in Indonesia which we should be able to access over the coming weeks,” he said.

“There’s been some representations that have been made to Saudi Arabia, to the UAE, to Qatar and also to Japan.

“There’s a taskforce which has been set up by the Prime Minister, which Angus Taylor is heading, which I’m participating in.

“We’re also working very closely with the sector here in Australia to make sure that we’re all seamlessly working to ensure that this supply of AdBlue will continue for the foreseeable future.”

Businesses and consumers have been urged not to stockpile the product.

Originally published as Crisis ‘more terrifying than any Covid headline’: China ban threatens national standstill