ABC RURAL REPORT WA | Fuel price risk grows as Middle East conflict impacts growers

Escalating tensions in the Middle East are raising concerns across the grains industry, with the risk of rising fuel prices landing at a critical time for seeding.

Grain Producers Australia Chair Barry Large told ABC Rural Report that increased volatility in global oil markets is already being felt, with growers watching closely as the situation develops.

Mr Large said the conflict has reintroduced significant risk into key supply chains.

“The escalating conflict involving Iran has pushed oil prices sharply higher and really has reintroduced a geographical risk to the major driver of grain and inputs into market,” he said.

With around 20 per cent of global oil supply moving through the Strait of Hormuz, Mr Large said uncertainty is high heading into a critical period for growers.

“There certainly is uncertain times for the grains industry at the moment,” he said.

He said while it is too early to see widespread changes in behaviour, growers are weighing up their options as they prepare for seeding.

“In my operation, we’ll certainly get a bit more on hand just to hedge our bet,” he said.

Looking longer term, Mr Large said the situation highlights the need to reduce reliance on global supply chains.

“We need to be able to protect our own sovereign risk… we do need to put a bit of effort into producing our own fuel and some of it,” he said.

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