Fertilizer prices affected by several factors

MANILA, Philippines — Fertilizer costs in the Philippines vary because of many factors, according to the Fertilizer Industry Association of the Philippines (FIAP).

High importation and logistics costs, the exchange rate and the country’s archipelagic nature are among the factors that affect price volatility of farm inputs like fertilizers.

FIAP president Michael Ardieta said these different factors result in the varying prices of fertilizers in different parts of the country.

“All urea are imported. The Philippines is a logistically challenged country as we have several islands to discharge fertilizers. The importers are subject to demurrage. We’re also challenged with the availability and efficiency of our ports,” he said.

Ardieta said since urea is very volatile in terms of costs and price, depending on the time and origin of purchase, the price could change in a week – either increase, decrease or as is.

“These are the financial exposures of every importer,” Ardieta said.

With the coronavirus disease 2019 or COVID-19 pandemic, Ardieta said operations costs also increased.

“We have to come up with mitigating actions to ensure safety and welfare of all involved in discharging the vessel – and these are all costs,” he said.

Commenting on the Department of Agriculture’s controversial fertilizer program, Ardieta said the P1,000 per 50kg bag of urea set by Department of Agriculture (DA) in its centralized fertilizer bidding “is fair and reflective of the average national retail price of urea in the country then, considering that it is delivered to municipalities and the definitely longer payment terms provided by the DA’s payment process demand.”

FIAP supports the DA’s free fertilizer distribution program to help local farmers increase food production in the country, noting that the centralized fertilizer bidding are “transparent and above board.”

Under DA’s Rice Resiliency Program, urea fertilizers are given free to farmers, with a “buy two, take two” scheme for those who use certified inbred seeds and “buy two, take three” for hybrid users.

However, several farmers’ groups and the Samahang Industriya ng Agrikultura (SINAG) have accused DA of overpricing.

Last April, the DA conducted its first centralized bidding for urea with an approved budget for the contract of P1,000 per 50-kilogram sack.

While FIAP is a SINAG member, Ardieta said it doesn’t mean that they have common statements because members and even non-FIAP members joined DA’s fertilizer bidding process. “We understand that all bidders complied with the requirements and within the set price of DA,” he said.