Farmer fertiliser hope as Iran ceasefire promises to reopen supply

Australia relies on imports of urea, which is the world's most commonly used fertiliser. (ABC Mid West Wheatbelt: Jo Prendergast)

Farmers are hoping the Strait of Hormuz will reopen soon, improving the supply and lowering the cost of fertiliser.

The federal government has secured nearly 100,000 tonnes of new fertiliser shipments, which will arrive in coming weeks.

Farmers are still weighing up how much fertiliser to use on their crops, to ensure they get good returns.

While a ceasefire deal between the US and Iran is yet to be finalised, the re-opening of the Strait of Hormuz could happen within days and farmers are optimistic about getting their hands on a reliable and cheaper supply of fertiliser.

A third of the world's fertiliser passes through the strait so its closure during the conflict cut off supplies into Australia and pushed prices up.

The federal government has secured an additional three shipments of fertiliser for farmers during the important winter cropping season but Rabobank agribusiness analyst Stefan Vogel said it would take a while for shipping to get back to normal.

The Strait of Hormuz could re-open within days. (Reuters Photo: Majid Asgaripour)

"Even though there might be ink on paper later this week … the flow of goods will take a little bit of time," Mr Vogel said.

Stefan Vogel says it will be some time before shipping gets back to normal. (Supplied: Rabobank)

Mr Vogel said shipping companies may also be nervous about resuming passage through the Strait of Hormuz.

"[They'll be thinking] 'the peace deal might fall apart and the ships might get stuck again'."

"We might see a few companies being a bit more reluctant to go in and out," he said.

Concern about tightened supply of fertiliser prompted the federal government to ramp up its efforts to secure shipments.

1.4 million tonnes of urea has been imported since late February, and three new shipments are on their way.

Incitec Pivot, CSBP, and Summit Fertilizer have been underwritten by the government with financial guarantees to put the three new boats on the water.

"We've got approximately another 98,500 tonnes of urea coming in for Australian farmers," agriculture minister Julie Collins said.

"That takes the total now through the Export Finance Australia arrangement to around 340,000 additional tonnes of urea coming into the country."

Urea is loaded onto a ship bound for Australia. (Supplied: Marnco)

"The news of an agreement is very good news…but certainly, we do know that recovery will take some time," she said.

One Australian fertiliser importer not involved