Fonterra confident supply demand will be met despite urea shortage

Fonterra Australia director of farm source Matt Watt said he was confident the shortage of urea - used in the diesel exhaust fluid AdBlue - would not affect its operations.

Australia has about seven weeks' worth of urea due to a global shortage as China restricts exports.

"It's something we're having to monitor daily," Mr Watt said.

"We don't have a line of sight about when it (the shortage) will end so until that happens we will continue to monitor it very closely."

Member for Wannon Dan Tehan, the national trade minister, urged businesses not to hoard a chemical key to keeping Australia's freight and logistics sectors on the road.

The federal government is speaking to countries including Indonesia about shoring up Australia's supply.

It is also approaching Saudi Arabia, the United Arab Emirates, Qatar and Japan.

Mr Tehan said the COVID-19 pandemic had highlighted the fragility of some supply chains.

"There will always be some stock which they (businesses) keep in warehouses," he told ABC radio. "But what we don't want to see is the excessive warehousing of AdBlue at this stage."

He is confident Australia will be able to secure the urea it needs.

"There is obviously issues around containers, shipping disruptions which we're also working through," Mr Tehan said. "But from everything that we're seeing, there is clear supply which we can bring to Australia."

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