Fertilizer firms mull anti-dumping case vs Chinese, Korean companies

Local fertilizer manufacturers are considering the possibility of filing an anti-dumping case against Chinese and Korean companies for exporting fertilizers at dumped prices to the Philippines.

Industry sources said cheap imported fertilizers have been entering the Philippine market at prices lower than the domestic prices in their country of origin, a clear indication of dumping.

According to a source, this is creating problems for local fertilizer manufacturers, as imports begin to eat into their market share.

The biggest local producers of various grades of fertilizers are Philippine Phosphate Fertilizer, jointly owned by Filipino businessman Jose Ch. Alvarez and the Nauru government, and Atlas Fertilizer Corp., owned by Anscor.

Under the Agriculture and Fisheries Modernization Act (AFMA), farmers are allowed to import raw materials and agricultural inputs duty-free but only if they do not go through importer/distributors. This means that fertilizers that are imported by trading corporations are covered by import tariff.

At present, the country imports various grades of fertilizers from the following sources: Bangladesh, Indonesia, Australia, Canada, China, Israel, Japan, South Korea, Malaysia, Nauru, Saudi Arabia, Singapore, Sweden, Thailand and the US.

Source said only China and South Korea were found to have been dumping fertilizers into the Philippines. He said he does not know how much of the market is being supplied by imports, but he said the share of local fertilizer has been steadily declining by at least two percent even if the market is not expanding.

This means imported fertilizers are eating directly into the share of local fertilizer producers.

The most commonly-used fertilizers are urea which sells at P380 per 50-kg bag in the retail market; amonium sulfate which sells at P223 per 50-kg bag and triple-14 sold at P391.73 per bag.

The usual practice, according to another source, is to price imported fertilizer at P5 to P10 lower than local fertilizer, a type of predatory pricing that had been detected in other imported products like cement.

Regardless of the landed cost of the product, the source said the imported fertilizer are always sold in the retail market at price levels closely following the domestic price of local fertilizer.

The source said this is an indication that farmers are not actually able to take full advantage of the cheap prices because importers are cornering the margin between the dumped price of the import and the domestic price of local products.

"The price difference is just so that local producers are edged out of the market," the source said. "In terms of whether rice prices will ultimately go down, they won’t because fertilizer costs, despite the dumping, are not reduced significantly enough for that to happen."

According to the source, however, local producers were still considering whether to file a case against the Chinese and Korean exporters as well as their local counterparts, which he said were mostly Chinese trading companies.