Fertilizer prices drop 20%

As a result of the continuous drop in oil prices in the world market, domestic prices of petrochemical fertilizers have likewise dropped by as much as 20 percent starting late October to early this month.

“The significant drop in fertilizer prices augurs well for our farmers, especially at this time when many of them are already planting for the 2009 dry crop,” said Department of Agriculture secretary Arthur Yap in a statement.

 He reiterated his directive to the Fertilizer and Pesticide Authority (FPA) to keep tabs on price movements and report to the DA price-gouging suppliers and dealers who continue selling their stocks at the steep rates.

Having checked the price movements of this essential farm inputs in his recent field trips, Yap said that retail prices of inorganic fertilizers have dropped by 20 percent to 30 percent in the provinces owing to last month’s decline in petroleum prices, which touched off a matching drop in the world market rates of petrochemical fertilizers.

Meanwhile, FPA data showed 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 down to $330 per metric ton (MT) from its original $702 rate in September, while the cost of 18-46-0 fertilizer fell from $1,270 to $950 and 21-0-0 fell from $390 to $366 over the same period.

Last month, Yap projected that the continued decline in petroleum prices will set off a matching drop in the retail cost of oil-based fertilizers, and had directed the FPA to monitor domestic prices.

He has also ordered the National Food Authority (NFA) to intensify its palay-buying operations this wet or harvest season by doubling the number of its mobile buying stations especially in faraway areas, following the recent Cabinet directive.

As result of the nonstop surge in oil rates in the world market and big demand by other countries during the first three quarters of 2008, fertilizer prices almost doubled this year resulting from a DA-monitored 30 percent decline in fertilizer usage by farmers during the wet crop.

The price increases led to a corresponding drop in per-hectare yields for those who have declined fertilizer usage.

Yap said that over the January-June 2008 period, the average per-ton rate of urea escalated in the world market from $382.20 to $604 while 21-0-0 from $187.25 reached to $345.95, 16-20-0 increased from $208 to $739.48; then 18-46-0 increased from $525 to $1,170 and 0-0-60, increased from $404 to $525.

Meanwhile the cost of 14-14-14 soared four times during the same six-month period from $208 to $880.

As a result of these price increases, the domestic retail prices of these six major fertilizer grades also sky rocketed this year.

FPA data noted that the average retail price of urea in the local market spiraled from P1, 036.95 per 50-kilogram bag to P1, 797.58 during the same January-June 2008 period while that of 14-14-14 increased from P1, 013.04 to P1, 921.21.

The 21-0-0 grade increased from P725.94 to P993.80 while 16-20-0 increased from P956.02 to P1, 874.04; the 18-46-0 grade increased from P1, 645.52 to P3, 138.40 and the 0-0-60 grade increased from P1, 102.85 to P1, 881.68.

Yap said that oil prices reached the $100 per barrel level earlier this year, reaching an all-time peak of $147 last July but world market prices have since retreated following the US-induced global financial collapse, with the per-barrel cost falling to $64.50 last October which later lead to drops in the domestic prices of high grade fertilizers.—Rhia de Pablo