The war in Iran did more than just disrupt the flow of oil and liquified natural gas (LNG) out of the Middle East, impacting the critical fuel supplies of many countries. It also disrupted another essential commodity: fertilizer. Around 30 percent of global nitrogen-based urea fertilizer, as well as large shares of ammonia and sulfur, normally move through the Persian Gulf region. When fighting escalated in late February, shipping insurers raised premiums, some vessels were delayed or stranded, and producers in Iran and Qatar temporarily cut output.
Australian agriculture is heavily dependent on imported fertilizer. Depending on the year, up to 80 percent of its fertilizer requirements are foreign sourced. This creates a food security vulnerability that the war exposed.
Yet just as Australia productively used its regional relationships to secure its fuel supply – with now greater fuel reserves than when the war began – it has done likewise with fertilizer. This week a ship carrying 47,250 tonnes of urea fertilizer from Indonesia docked in Brisbane, part of a 250,000-tonne agreement between the two countries.
Given that Australia is a significant agricultural exporter to Indonesia, it is in Jakarta’s interests for Australia’s agricultural industry to be productive. As Indonesia is the second largest importer of wheat in the world, Australia has been able to provide it with supplies that had been affected by the war in Ukraine.
Food security has become a serious geopolitical concern since the disruptions of the COVID-19 pandemic, as well as the wars in Ukraine and Iran. Fertilizer markets have been among the most severely affected, with price surges as sanctions, energy shocks, and shipping bottlenecks combined into supply chain constraints. It’s clear to governments how dependent food production is on events that may be far beyond their borders.
While Australia is a major agricultural exporter, Indonesia possesses substantial fertilizer production capacity through its state-owned industrial companies. This means that there is a genuine economic complementarity between the two countries – a previous lack of which had hindered the trading relationship.
Yet the fertilizer agreement is more than simply a commercial transaction. The two governments have framed the deal as part of a broader Indo-Pacific food security and supply chain resilience agenda. The two countries are seeking to present themselves to the wider Indo-Pacific region as capable operatives in finding solutions to regional issues on vital interests like food security.
This short notice cooperation is becoming more strategically important as both countries attempt to navigate a global environment that is defined by geopolitical competition, economic uncertainty, and new military flashpoints with significant knock-on effects. It creates the practical architecture that can expand to other commodities. It may be fertilizer today, but it could be any number of other essential products tomorrow. The value is of course in the production, but it is also in the trust – of knowing that the two neighbors can quickly work to resolve each other’s problems.
This kind of practical initiative enables Australia and Indonesia to overcome the barrier of their cultural differences. Arguably no two neighbors are more culturally different than Australia and Indonesia. It requires a great deal of work to build implicit trust. It is through consistent practical problem-solving that this trust can build up and expand into other areas of cooperation.
The government of Prime Minister Anthony Albanese has made a concerted effort to enhance the relationship with Indonesia, producing the Comprehensive Strategic Partnership Plan of Action for 2025–2029, which aims to build cooperation across economic development, politics and security, and maritime affairs, while expanding people-to-people and institutional exchanges at all levels of society.
Alongside this, the Treaty on Common Security – settled in February 2026 – is seen as being the most significant step in the bilateral relationship in 30 years, binding both nations to regular high-level consultations and a shared vision connecting security with economic prosperity. This has also been used to develop trilateral formats with Japan and with Papua New Guinea.
These agreements create the institutional frameworks that allow other practical measures to flow. They also demonstrate the goodwill that now allows Albanese to pick up the phone and to president his Indonesian counterpart, Prabowo, whenever necessary and to find mutually beneficial solutions. Tonnes of fertilizer are being unloaded in Brisbane for Australian farmers. It’s not a one-off deal but rather the product of consistent fertilizing of the relationship between Canberra and Jakarta.
