According to a source in the fertiliser industry, the Chinese have implemented a further 100pc export tax, to take the tax levels to 135pc, essentially making all exports prohibitive.

The reduction in world supply has already seen a rise of over $A100 a tonne in the international urea price.

The flagship Middle East granular urea price has risen from $US405/tonne on April 10 to $US503/t on April 17.

Australian prices have not yet spiked, with many of the big suppliers holding positions on nitrogen-based products.

Currently, the Australian urea price is around $620/t, but it is only a matter of time before Australian prices follow the world trend.

Darryl McCrae, Agritech Rural, Horsham, Vic, said he expected there to be a sharp increase in prices between now and June.

“It could be $40/t, it could be $100/t, it’s hard to say exactly, but I would say it is going to go up in the next month.

“We have been recommending that people who think they will need urea get in and secure their supplies before the prices go up.”

The only possible flipside will be if the dry opening to the season persists in key cropping zones around the country, forcing a decreased planting.

The Chinese decision, which will apply until September, is believed to have nothing to do with the Beijing Olympics, which has caused a disruption of key farm chemical supplies, such as glyphosate, as the Chinese shut down production plants to minimise air pollution.

It is believed that the Chinese fertiliser decision has been made in an attempt to shore up food security.

There is a reduction in arable land in China and the Chinese government is looking to improve the productivity of its own agriculture sector.

SOURCE: National grains news from Rural Press weekly rural newspapers, updated daily on FarmOnline