Minister for Competition Policy and Consumer Affairs, Chris Bowen, last week released the ACCC's report on fertiliser prices.

The ACCC conducted an informal examination of fertiliser prices and, in particular the reasons for dramatic increases in domestic fertiliser prices, following complaints from farmers who felt they were being ripped off by companies engaged in price gouging.

But the ACCC found that the significant rises in fertiliser prices in Australia were mainly attributable to rapidly increasing global fertiliser prices.

The report comes ahead of a Senate Committee inquiry into the same matter, where Rural and Regional Affairs Committee chairman, Senator Bill Heffernan, is expected to call the ACCC to give evidence.

The ACCC report said the rising international price prices were caused by a substantial increase in world demand for fertilisers, associated with an expansion in agricultural production (particularly grains for food, feed for livestock and bio-fuels), and by rises in costs of production associated with the increasing cost of energy.

Incitec Pivot's general manager for strategy and business development, Jamie Rintel, welcomed the ACCC's conclusions.

"We understand farmers’ concerns over rising prices, but Australia is only a small player in the international scene, representing less than two per cent of global fertiliser use," he said.

Mr Rintel said high fertiliser prices made it more important than ever for farmers to choose the most cost-effective fertiliser and apply it at optimum rates.

* The ACCC report is available at www.accc.gov.au/content/index.phtml/itemId/810233.