Fertilizer prices down 43.7%

Fertilizer prices have dropped by as much as 43.7 percent in December following calls by the Department of Agriculture (DA) for fertilizer suppliers to pull down their retail rates amid the continuously softening cost of crude oil in the world market.

In a report to Agriculture Secretary Arthur Yap, DA Undersecretary Jesus Emmanuel Paras said that as of Dec. 9, fertilizer prices in 11 major warehouses of the Philippine Phosphate Fertilizer Corp. (Philphos) across the country are now significantly lower compared to what they cost last September.

The price of Triple 14 fell 27.8 percent or from P1, 940 to P1,399 per bag, while 21-0-0 dropped 43.7 percent from P1,065 to only P599 per bag. 

The cost of 16-20-0 declined from P1,410 to P1,399 per bag.

Urea, which will be available in Philphos warehouses by Jan. 8 next year, will cost only P999 per bag compared with its price of P1,900 per bag last October, translating to a 47.4 percent drop.

Paras reported to Yap that Philphos warehouses in Poro Point, Bulacan, Naga, Puerto Princesa, Iloilo, Bacolod, Cebu, Leyte, Cagayan de Oro, Davao, and General Santos are already selling petrochemical-based fertilizers at these lower prices.

He said that an aggregate volume of 143,994 bags of Triple 14, 115,006 bags of 16-20-0, and 90,180 bags of 21-0-0 are available and ready for sale in these warehouses.

”The decline in the prices of petroleum-based fertilizers was the result of the DA’s call to suppliers to make available at the lowest possible cost these farm inputs amid the sharp drop in crude oil prices in the world market,” Paras said.

Last November, Yap said that the downtrend in the prices of oil-based fertilizers was good news for the agriculture sector, especially with palay farmers having started planting for the 2009 dry or summer crop.

To ensure that the costs of petroleum-based fertilizers remain low as a result of the decline in world crude oil prices, Yap had directed the Fertilizer and Pesticide Authority (FPA) to keep a tight watch over the prices of these farm inputs and check against the “price gouging” activities of certain dealers and retailers.

FPA data also show that the import prices of major grades of fertilizer have sharply dropped as of the last week of October. For instance, the import price of urea plunged to $330 per metric ton from $702 per MT in September, while the cost of 18-46-0 fell from $1,270 to $950 and 21-0-0 from $390 to $366.

Fertilizer prices almost doubled this year as a result of the non-stop jump in oil rates in the world market and big demand by other countries during the first three quarters of 2008.

The DA then monitored a 30 percent decline in fertilizer usage by farmers during the wet crop, leading to a corresponding drop in per-hectare yields.

 FPA data bared that the average retail price of urea spiraled from P1,036.95 per 50-kilogram bag to P1,797.58 during the same January-June 2008 period; that of 14-14-14, from P1,013.04 to P1,921.21; of 21-0-0, from P725.94 to P993.80; of 16-20-0 from P956.02 to P1,874.04; of 18-46-0, from P1,645.52 to P3,138.40; and of 0-0-60, from P1,102.85 to P1,881.68.

Oil prices breached the $100 per barrel level earlier this year, reaching an all-time peak of $147 last July.