标签： Oceania

As spring planting gets underway across the United States, agricultural producers in major farm belts are facing an unprecedented crisis, driven by geopolitical unrest thousands of miles away. The conflict that followed US-Israeli strikes on Iran, which prompted Tehran to block the Strait of Hormuz — a critical global chokepoint for fertilizer and energy shipments — has sent input costs soaring and left growing numbers of farmers waiting for delayed orders they urgently need for this year’s growing season.

On Andy Corriher’s North Carolina corn and soybean operation, the timing could not be worse. Spring is the period when most American farmers apply the bulk of their fertilizer for the year, and Corriher is among the many who found themselves forced to buy supplies just as prices skyrocketed and shipments stalled. “We got hit at the worst possible time, because we’re trying to buy fertilizer when it skyrockets and when the supply also gets cut,” the 47-year-old grower told AFP. He noted he placed orders for multiple loads of liquid nitrogen weeks ago, but suppliers still cannot give him a firm delivery date. Since the blockage of the strait, Corriher estimates the price of his nitrogen fertilizer has jumped by at least 40 percent, while urea — a widely used nitrogen-based fertilizer — has seen a roughly 50 percent price spike at the Port of New Orleans. To cope, he has cut his fertilizer application by a third, a move he fears will lead to lower crop yields at harvest.

Corriher is far from alone in facing this sudden squeeze. Russell Hedrick, a 40-year-old farmer who grows corn and soy across 1,000 acres near Hickory, North Carolina, said around three-quarters of his fertilizer purchases for this season happened after prices rocketed. Unlike large industrial agricultural operations, most small to mid-sized American farmers lack the on-farm storage capacity and upfront capital to stock up on bulk fertilizer months ahead of planting season, leaving them exposed to sudden market shocks. Even before the current conflict, Hedrick noted, steadily rising input costs had forced farmers to carefully ration every pound of fertilizer to maximize output. Now, he has cut application rates down to the “bare minimum,” holding off on additional applications in the hopes prices will cool later in the season. “This year, we just kind of got blindsided,” he said, comparing the unexpected disruption to pre-planned export restrictions that caused fertilizer shortages in 2021, shortages that farmers had time to prepare for.

The crisis has put political pressure on the Trump administration, as farmers make up a core support base that delivered 78 percent of the vote in agricultural-dependent counties to Trump in the 2024 election. Over the weekend, Trump blamed the price hikes on “price gouging from the fertilizer monopoly,” and reassured producers that “American Farmers, we have your back!” US Agriculture Secretary Brooke Rollins attempted to downplay the severity of the crisis, noting that 80 percent of American farmers had already purchased their spring fertilizer before the conflict broke out. But that assessment offered little comfort to the 20 percent of producers who lacked the funds or storage to buy early. For Derrick Austin, a 55-year-old grower based in Marshville, Rollins’ comments were a “gut shot.” After hearing news of the Strait of Hormuz blockage, Austin immediately called his supplier to lock in supply before prices rose. “Thankfully, he let me buy three loads of nitrogen at the old price per ton so I could at least fertilize my wheat crop,” he said. “It was devastating.”

For many long-time Trump supporters in farm country, the crisis has sparked new questions about the administration’s handling of the Middle East conflict, even as most remain hesitant to abandon their support. Corriher, who has backed Trump in past elections, said the crisis “didn’t seem like we had really thought out all the consequences to the American people. I feel like these things were kind of overlooked as part of collateral damage.” The surge in fertilizer costs has been paired with simultaneous spikes in gasoline and diesel prices, hitting both farmers and ordinary American households: “Everybody seems to be suffering.” Austin said the conflict has left him questioning the administration’s decision-making, though he still believes the current administration “still beats some of the alternatives.” Hedrick, who has voted for Trump three times, struck a similar balance: “He’s human like the rest of us. I think he makes good calls, I think he makes mistakes. If the conflict’s resolution brings long-term peace and a reopened Strait of Hormuz, that’s all I can hope for.”

Agricultural economists warn that the long-term impact of the crisis will depend on how quickly the conflict is resolved. The US agricultural sector has already been locked in a prolonged recession for the past two years, noted Chad Hart, an agricultural economist at Iowa State University, with net farm income declining while overall business costs remain persistently high. For 2025, the overall impact may be muted, as many producers who bought fertilizer early will avoid the worst of the price hikes, keeping overall margin losses lower than initially feared. But if the conflict drags on and the Strait of Hormuz remains blocked, Hart warned the 2027 crop cycle could face far more severe disruptions that would send ripple effects through global food markets.

Australia’s economic sentiment has suffered its sharpest contraction since the height of the COVID-19 pandemic, driven by a crippling new cost of living shock that has left both households and bracing for severe economic headwinds, new industry surveys show.

The monthly Westpac-Melbourne Institute Consumer Sentiment Index, a key measure of Australian household economic outlook, recorded a dramatic 12.5% nosedive in April, dragging the headline reading down to 80.1. By standard survey conventions, any score above 100 signals a net optimistic outlook among consumers, while readings below 100 reflect widespread pessimism. The latest result sits near all-time historic lows, though it remains slightly above the extreme troughs recorded during peak COVID-19 lockdowns and the early 1990s Australian recession.

“Australian consumers are being hit by another cost of living shock,” explained Matthew Hassan, Westpac’s head of Australian macro forecasting. Surging fuel prices have emerged as the single biggest drain on household budgets, dragging the corresponding survey subindex down 16.7% year-on-year to 66.8. The sharp decline follows a record jump in national average petrol prices, which hit $2.40 per litre in early April – a 77-cent increase from February that marks the largest percentage price spike in the survey’s decades-long history.

All five of the index’s core subindicators deteriorated sharply in April, with measures of current economic conditions faring the worst. Near-term expectations for both national economic performance and personal household finances also fell steeply, a trend Hassan says signals consumers see almost no chance of near-term relief and are preparing for ongoing hardship.

Fears of another interest rate increase from the Reserve Bank of Australia (RBA) are also weighing heavily on consumer sentiment, Hassan added. Global energy market volatility stemming from international conflicts has stoked inflation concerns, leading many consumers to bet the RBA will implement another rate hike to cool price growth. The Westpac-Melbourne Institute Mortgage Rate Expectations Index, which tracks household forecasts for variable mortgage rates over the coming 12 months, rose 3.9% in April to 177.2, returning to the recent cycle’s multi-year highs.

Money markets are currently pricing in a 65% probability that the RBA will raise the official cash rate when its board meets on May 4-5. If the hike goes through, it will mark the third interest rate increase in 2026 and fully undo the four rate cuts the central bank implemented in 2025, leaving households facing even higher mortgage repayment costs.

The economic uncertainty has also spiked fears of job losses, pushing unemployment expectations to their most pessimistic level since August 2020 – one of the darkest periods of the COVID-19 pandemic, shortly before the federal government expanded the JobKeeper wage subsidy program to prevent mass layoffs. Data shows the jump in job insecurity is most acute among workers in sectors directly exposed to energy and interest rate volatility, particularly construction and hospitality.

The bleak sentiment is not limited to households: separate monthly survey data from the National Australia Bank (NAB) shows Australian business confidence has suffered its second-largest one-month drop in 37 years. The plunge comes on the back of the recent outbreak of conflict in the Middle East and soaring domestic fuel prices, which have combined to amplify existing price pressure pressures across the economy.

In the first full survey reading collected after the Middle East conflict began, NAB’s business confidence index plummeted 29 points to a negative reading of minus 29. Falls of this magnitude have only been recorded twice before in the survey’s history: during the 2008 Global Financial Crisis and at the onset of the COVID-19 pandemic in 2020.

Unlike consumer sentiment, however, actual business activity has so far held relatively steady. NAB’s measure of business conditions fell just one point to six index points in March, indicating that while geopolitical and inflationary shocks have hit business outlook, the real impact on day-to-day operations has yet to fully materialize. “It is still early days in terms of the flow through to activity,” noted Gareth Spence, NAB’s head of Australian economics. Confidence is now negative across every Australian state and territory, though business conditions remain positive in most regions.

The sharp synchronized drop in both consumer and business sentiment marks one of the most significant weakening in Australian economic outlook outside of formal recession periods, reinforcing warnings from top RBA officials about ongoing economic instability and persistent inflationary risks.

Six weeks after the outbreak of new conflict in the Middle East, global oil prices have doubled, triggering stark warnings from top Australian central bank officials that the country could face what many call the “central banker’s nightmare” — a toxic combination of rising inflation and slowing economic activity. The unfolding economic shock is already casting uncertainty over household finances and interest rate trajectories for Australian mortgage holders.\n\nReserve Bank of Australia (RBA) Deputy Governor Andrew Hauser outlined the grave risks during a public fireside chat with the Money Marketeers group in New York, speaking as national consumer sentiment indexes have slumped to all-time historic lows across Australia. While Hauser noted that weak sentiment readings do not always guarantee a corresponding drop in consumer spending, he cautioned that if the surveys accurately reflect underlying trends, Australia is heading for a significant income shock.\n\n“That is the central banker’s nightmare, you know, inflation up, activity down and judging the balance between the two is how we earn our money,” Hauser told the audience. This worst-case outcome, known as stagflation, creates an intractable policy dilemma for central banks: raising interest rates to curb inflation can further drag on already slowing growth, while cutting rates to stimulate activity can make soaring price pressures even worse.\n\nThe disruption to global energy markets from the Middle East conflict has already complicated the RBA’s long-running push to bring inflation back down to its target range of 2 to 3 percent, Hauser added. “I wouldn’t say we have high confidence that we’ve set interest rates at the right level because you never do have that high confidence. But we’re going to have to monitor this new shock pretty carefully,” he said. “I think it is easy to see that upside inflation pressure. More important for us now is to think through what the medium-term impact might be.”\n\nHauser emphasized that inflation is already “too high” in Australia, and the energy price spike spurred by the Gulf conflict is delivering a “big income shock for Australia” that ripples through every sector of the economy. The conflict has disrupted shipping through the Strait of Hormuz, the strategic global oil chokepoint that typically carries roughly one-fifth of the world’s daily oil trade, cutting off key supply routes for global energy markets.\n\nBefore the conflict began six weeks ago, benchmark oil traded at roughly $US56 per barrel; as of this week, prices hover around $US100 per barrel. For Australian motorists, this surge translates directly to higher fuel costs: every $US10 per barrel increase in oil prices adds approximately 10 Australian cents to the price of fuel at the pump, piling extra pressure on already stretched household budgets.\n\nPrior to the outbreak of conflict on February 28, Australia’s annual Consumer Price Index (CPI) fell 0.1 percentage points to 3.7 percent in February, but that figure still remained well above the RBA’s 2-3 percent target range. Already, federal Treasurer Jim Chalmers has updated the government’s economic modelling to account for worsening supply disruptions: early projections showed that prolonged fuel market disruption could push Australian inflation close to 5 percent, and Chalmers recently noted that even that grim forecast “look pretty conservative now.”\n\n“ We’ve asked for some more, challenging circumstances to be modelled,” Chalmers said. The two core variables shaping the government’s scenario planning, he added, are the duration of the conflict and how long it will take for global energy markets and the Australian economy to “get back on track after the hot part of hostilities.”\n\nWhile Hauser stopped short of predicting that Australia will enter a full recession, even with consumption already running at relatively low levels, financial markets are already bracing for further interest rate hikes. The RBA has already raised interest rates twice in 2025, pushing the official cash rate back to 4.1 percent — undoing two of the three rate cuts implemented in 2024, and leaving rates at their highest level since April 2012. As of the latest market pricing, investors see a roughly 65 percent chance of another rate increase when the RBA holds its next policy meeting in May, just one week ahead of the release of the federal government’s annual budget.

The ongoing geopolitical turbulence stemming from the Middle East conflict has sent global oil markets into a state of extreme volatility, triggering cascading disruptions for Australia’s aviation industry and leaving leisure and business travellers facing steeper costs and fewer travel options. Australia’s flag carrier Qantas Airways has become the first major airline to roll out sweeping operational adjustments to offset the unexpected surge in jet fuel expenses, announcing deep cuts to domestic flight capacity, targeted changes to its international route network, and immediate passenger fare increases.

Before the outbreak of the latest hostilities in the Middle East, global benchmark crude traded at roughly $56 per barrel, equivalent to around 80 Australian dollars. In just weeks of escalating tensions, that price has jumped to trade near the $100 per barrel mark, or 143 Australian dollars. Most dramatically, Qantas reports that jet fuel refinery margins have exploded from an already elevated $20 per barrel ($28 AUD) to as high as $120 per barrel ($169 AUD). Looking ahead to the June quarter, the airline now projects that unhedged jet fuel prices will sit between 185 and 200 Australian dollars per barrel.

The revised fuel cost projection for the second half of Qantas’ current financial year now lands between $3.1 billion and $3.3 billion, representing a $600 million to $800 million increase from the company’s earlier guidance. In an official media statement, Qantas noted that its leadership team continues to closely monitor the fast-evolving geopolitical and market environment, maintaining flexible contingency plans to implement additional cost mitigation measures if oil prices continue their upward trend.

To balance its budgets amid the price shock, Qantas is cutting domestic flight capacity by 5% and reshuffling its international network. The airline confirmed it is reallocating aircraft and crew capacity pulled from U.S. routes and the shrunken domestic network to boost flight frequencies to Paris and Rome, where it has recorded sustained strong demand from international travellers. Despite the capacity cuts, Qantas emphasized that overall travel demand remains robust across its network, and projects that revenue per available seat kilometre will double from prior period levels.

Passengers booked on affected Qantas and Jetstar (Qantas’ low-cost subsidiary) flights will be contacted directly by the airline, with options to rebook onto alternative services or claim a full refund for unused tickets. On the supply front, Qantas says it is coordinating closely with federal government regulators and its network of jet fuel suppliers, who have guaranteed consistent fuel availability through the rest of April and well into May. Even so, the airline cautioned that ongoing uncertainty surrounding global energy supply chains means the situation remains fluid.

In additional financial adjustments released alongside the operational changes, Qantas announced that it will cap its total capital expenditure for the 2026 financial year at or below $4.1 billion, which falls at the lower end of its previously released guidance range. The airline confirmed that its previously announced $300 million interim dividend, equal to 19.8 cents per share, will still be distributed to shareholders on April 15, as scheduled. However, the company has scrapped a planned $150 million share buyback program to preserve cash amid heightened market uncertainty.