The Fertilizer and Pesticide Authority (FPA) said the government should study the possibility of entering into bilateral agreements with countries producing fertilizers to reduce the acquisition cost through tariff cuts.
This is among the key policy shifts proposed by a FPA study to arrest rising costs of farm inputs.
The study said 90 percent of the local fertilizer manufacturers’ raw materials are imported.
The study attributed the rising global fertilizer prices to the pandemic, high fuel costs as well as the disruption of production and trade due to the Russia and Ukraine war.
It said from February to April 2022, the lowest average import price of prilled urea is from Uzbekistan stood at $648 per metric ton (MT), granular urea from China at $602 per MT, ammosul from Japan at $296.58 per MT, complete fertilizer from South Korea at $608 per MT, ammophos from South Korea at $490 per MT, muriate of potash (MOP) from Jordan at $570.37 per MT and di-ammonium phosphate (DAP) from China at $900 per MT.
These prices automatically affect regional dealers prices due to archipelagic situation that entails additional logistical cost.
Locally, the price of prilled urea is highest in Western Visayas at P2,814.83 and lowest in Caraga at P2,536.11; granular urea is highest in Bicol at P2,826.33 and lowest in Central Visayas at P2,430; ammosul, highest in Cordillera Administrative Region (CAR) at P1,533.65 and lowest in Davao Region at P1,302.31; complete fertilizer is highest in CAR at P2,220.37 and lowest in Soccsksargen at P1,793.50; ammophos, highest in Bicol at P1,948.55 and lowest in Soccsksargen at P1,583.54; MOP is highest in Zamboanga Peninsula P2,054.51 and lowest in Cagayan Valley at P1,749.20; and DAP is highest in Central Visayas at P2,944.30 and lowest in Eastern Visayas at P1,883.33.
The study also said this pricing indicates different fertilizer grades are generally lower in nearby seaports, revealing that variation in dealer’s prices is influenced more by the company, brand and logistical cost.
FPA’s study said the government may tap suggested retail price and maximum retail price mechanisms calculated based on the source of origin and centered on the location where the fertilizers are locally sold.
The FPA also said government should intensify the monitoring of fertilizer prices from imports to those of dealers to provide more accurate data and help improve price studies in the future.
It also cited the need for improved inventory monitoring with the use of a watch system as well as the utilization of batch number of importers and local producers to cover source of origin, manufacturing date, date of arrival and landed cost for imports.
Importing companies are also urged to coordinate and order bulk imports from certain countries to avail lower prices and discounts and save freight costs as well as provide market assistance in regions where fertilizer is expensive to ensure supply and lower fertilizer prices by reducing additional transportation costs.
