Philippines urged to pursue government-to-government fertilizer deals

MANILA, Philippines — The Fertilizer and Pesticide Authority (FPA) said the  government should enter into bilateral agreements with fertilizer-producing countries to bring down acquisition cost.

In a study titled “Philippine fertilizer price outlook: A reality for farmers and fishers,” the FPA  also pushed to institutionalize the incorporation of a suggested retail price (SRP) and maximum retail price (MRP) on a per region basis.

“Likewise, variation in dealer’s prices is influenced more by the company, brand and logistical cost hence, the incorporation of SRP and MRP should be calculated based on the source of origin and be institutionalized by the Department of Agriculture (DA) and Department of Trade and Industry (DTI) centered on the location where the fertilizers are locally sold ...,”  said authors FPA deputy executive director Myer Mula and economist II Kimberly Coronado.

In setting the SRP and MRP, FPA said the  retail prices should be computed based on the location where the fertilizers are locally sold.

Moreover, the DA and DTI should base the SRP and MRP for every import entry on the adaption of the calculation of fertilizer price matrix at various cost levels.

The FPA also said the government should improve the monitoring of fertilizer prices from imports to recording dealer’s prices.

“The improvement of monitoring of fertilizer imports should require more information from the importers to aid in better record-keeping and estimation of actual prices. This will result in more accurate data and help improve price studies in the future. Moreover, reporting of price values in averages only might not be an accurate representation of the dealer’s prices given the differences in prices per region,” it said.

Pertinent information should  cover source of origin, manufacturing date, date of arrival, and landed cost for imports.

The FPA also said importing companies should be urged to coordinate and order bulk imports from certain countries, if possible, to avail of lower prices and discounts and save freight costs.

“Fertilizers imported at lower prices and less cost will result in cheaper fertilizers available for farmers in the market,” it said.

Government should also provide market assistance in regions where fertilizer is expensive to ensure supply and lower fertilizer prices by reducing additional transportation costs.

“Further market study should also be conducted at the regional level to assess the possibility of providing the same market intervention while conducting consultations with the stakeholders,” the FPA said.

It said the country should also introduce the practice balanced fertilization strategy to lessen the impact of high fertilizer prices.

To lessen dependence on chemical fertilizers, the government should also explore the use of alternatives like organic, microbial, and biorational fertilizers, the FPA said.

The country is heavily reliant on imported fertilizers and its raw materials, which makes it vulnerable to the rising fertilizer prices.

The  prices of fertilizers sharply increased worldwide as the COVID-19 pandemic caused shortages around the globe, higher input costs and fuel prices, disruption of production and trade, as well as the impact of the Russia-Ukraine war.

Results of the study revealed that import prices vary from country to country and started to increase in early 2021.

“Fertilizer prices in the Philippines started to increase during the mid-year of 2021 and further surged towards the end of the year,” the authors said.

The average price of urea doubled from P1,037.83 per 50-kilogram (kg) bag in November 2020 to P2.082.14 per 50-kg bag in November last year.

Ammonium sulfate price also surged by 109 percent from December 2020 to December 2021.

Prices of ammonium phosphate and complete fertilizer rose by more than 50 percent while muriate of potash and diammonium phosphate prices increased by around 40 percent, the agency said.