Cereals and fertilizers inflation

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The Philippines’ overall inflation increased from 1.4 percent in April 2025 to 7.2 percent in April 2026 and it is bad. But an even worse inflation is registered in other consumer goods like cereals and fertilizers.

I checked the Excel table of the Philippines Statistics Authority on wholesale prices of cereals, and the following caught my attention.

Well-milled rice per kilo, from P42.94 in April 2025 to P52.05 in April 2026, a 21.2 percent increase, that’s large. Over the same period the largest increases were registered in Central Visayas or Region 7, from P47.68 to P60.55; Davao Region or Region 11, from P 43.45 to P56.07; SOCKSARGEN or Region 12, from P37.20 to P52.91/kilo or 42.2 percent increase; Caraga or Region 13, from P43.65 to P57.25; and BARMM, from P41.14 to P54.00, or 31 percent increase in both Caraga Region and BARMM.

White corn grits, April 2025 to April 2026, from P31.43 to P51.95 or 65.3 percent increase. Largest increases were recorded in these regions: Central Visayas, from P36.00 to P63.48 or 76 percent increase; Zamboanga Peninsula or Region 9, from P24.80 to P49.20 or 98.4 percent increase; Caraga or Region 13, from P29.50 to P56.00 or 90 percent.

Those with modest increases are special rice, from P50.04 to P57.33 or 14.6 percent increase. Yellow corn grits, from P29.66 to P31.85 or 7.4 percent increase.

There is no explanation or discussion given in the PSA Excel tables for the high price increases of those commodities. The most likely and understandable reason is higher cost of harvest and thresher, transportation because these are influenced by higher prices of diesel.

I have repeatedly argued that government should have suspended the oil excise tax especially for diesel because it is used by tractors, harvesters, irrigation pumps, trucks, fishing boats and many other machines and vehicles.

Sure there will be decline in overall revenues. Then it can be compensated by a cut in spending in some sectors. A tax cut can be considered as equivalent to government subsidy across the board with little or zero additional cost like fielding personnel to various areas to distribute certain cash or in-kind subsidy to public transportation, and the occasional wastes and corruption in implementing such subsidy.

In the coming planting season starting this June, a new price hike to watch is the cost of fertilizers. Global price of sulfur in particular has been rising from a pre-war price in Feb. 27 of China’s yuan (CNY) 3,877/ton to CNY 6,800 last April 08, declined a bit then resumed increase to CNY 7,803 last May 12.

Sulfur is used mainly to produce sulfuric acid, essential for manufacturing phosphate fertilizers, chemicals, and refined petroleum. Other industrial applications include  vulcanizing rubber, creating detergents, and production of fungicides and pesticides.

Another major fertilizers ingredient is ammonia or NH3. Its main application is nitrogen fertilizer to produce urea, ammonium nitrate, ammonium phosphates to provide nitrogen to crops. Minor applications include the production of plastics, explosives, fabrics, and pesticides.

The price of ammonia has increased from Feb. 27 level of $518/ton to $805/ton on April 24 or after eight weeks of Middle East war, latest price is $799/ton last May 11.

Sulfur, ammonia, phosphates, etc are derived from oil-gas refining. More oil-gas production and refining means more fertilizers production, higher crop yield and higher food production in the world.

That is why it is wrong to keep demonizing hydrocarbons and fossil fuels. Oil-gas produce not only gasoline, diesel and LPG, they also produce various petrochemical products from paint and varnish to plastic and nylon, synthetic rubber tires to asphalt, fertilizers and medicines and many other industrial goods.

We should expand drilling and exploration for more indigenous oil and gas, onshore and offshore, national or regional cooperation with neighbors like Malaysia, Indonesia, Vietnam and China.

We should set aside climate alarmism and war mongering and instead focus on expanding our domestic energy supply, domestic fertilizers and petrochemicals production. Save our jobs and businesses, save the hungry, and not save the planet as the planet is fine adapting to natural warming-cooling cycle for the past 4.6 billion years.