Fertilizer prices in steady drop

After the Christmas season, fertilizer prices have dipped further with retail rates now 53 percent lower than its September 2008 level.

In a report, the Department of Agriculture (DA) said that the lower rates of fertilizer can be attributed to the present lower crude oil prices in the world market as well as the agency’s efforts to have a positive trend impact on the domestic cost of petrochemical-based fertilizers.

DA said that as of the 2nd week of January, the prices of Triple 14 fertilizer have fallen 44.8 percent from P1, 940 in September to the current P1, 070 per bag, while 21-0-0 dropped 53 percent from P1, 065 in the same month to only P499 per bag.

The cost of 16-20-0 declined by 31.2 percent from P1, 410 to P970 per bag and 46-0-0 from P999 to P850 per bag.

In mid-December, the cost of Triple 14 was P1, 150 a bag and its price had dropped seven percent as of the first week of January while the price of 16-20-0 fell 15.6 percent from P1, 150 a bag in mid-December.

Earlier, officials of the Philippine Phosphate Fertilizer Corp. (Philphos) informed the DA that urea, which will be available in Philphos warehouses this month now cost only P999 per bag compared with its price of P1, 900 per bag last October and translates into a 47.4 percent drop.

DA also noted that this swift decline in the prices of petroleum-based fertilizers was also partly the result of the agency’s call on suppliers to make available at the lowest possible cost these farm inputs along with the sharp drop in crude oil prices.

Last November, the DA secretary 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.

And to ensure that the costs of petroleum-based fertilizers remain low, the secretary also directed the Fertilizer and Pesticide Authority (FPA) last November to keep a tight watch on the prices of these farm inputs and check against the “price gouging” activities of certain abusive dealers and suppliers.

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 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 nonstop jump in oil rates in the world market and big demand by other countries during the first three quarters of 2008, touching off a DA-monitored 30 percent decline in fertilizer usage by farmers during the wet crop as a result which led to a corresponding drop in per-hectare yields for those who decreased usage on this input. --- Rhia de Pablo