DA moves to cushion impact of ME war on fertilizers

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MANILA, Philippines —  The Department of Agriculture (DA) has formed a team to assess the country’s fertilizer supply situation amid anticipated price shocks on the planting input as a result of the worsening war in the Middle East.

Agriculture Secretary Francisco Tiu Laurel Jr. said the team consists of representatives from the Offices of the Undersecretary for Operations, Rice Industry Development and Planters Products Inc.

The team has been consulting with private sector stakeholders to have a “clearer” picture of the country’s fertilizer supply situation and prepare the necessary measures to adjust to current global market conditions, Tiu Laurel said.

“We are getting all the numbers and sources of oil-based fertilizer and we are working on alternatives as we speak,” he told The STAR.

“We will try to forecast what will happen and see what alternatives we have,” he added, noting that one of the alternatives they are looking at is the use of biofertilizers.

Tiu Laurel said the team would update him within the week and make the necessary recommendations based on the gathered information.

Industry sources have noted that an increase in fertilizer prices may force farmers to cut back on their planting input, thus leading to sub-optimal crop yield, resulting in lower food supplies. This may also drive up the cost of food items since some farmers may be forced to pass on the additional costs they have incurred.

University of Asia and the Pacific’s Center for Food and Agri Business executive director Marie Annette Galvez-Dacul said fertilizer prices may rise with the escalating tensions among the US, Israel and Iran. However, the spike in fertilizer prices may not be as ”sharp” as in 2022 during the Russia-Ukraine war.

“The main reason is energy – higher oil and gas prices or disruptions to shipping routes like the Strait of Hormuz can make fertilizer more expensive, even if supplies are available,” Galvez-Dacul told The STAR.

She said the government may help farmers cope with the rise in fertilizer prices through subsidies, loans, buffer stocks and by diversifying import sources so that small farmers may continue using fertilizers without cutting back.

The National Confederation of Irrigators Associations and the University of the Philippines-Los Baños Biotech urged President Marcos to mandate the use of locally developed biofertilizers like Bio N to help farmers cope with the anticipated spike in global fertilizer prices.

“The next urea shock is not hypothetical. It is a question of when, not if,” the two groups said in a recent letter addressed to the President.

“Any disruption in gas supply or shipping routes in the region immediately translates into higher urea prices worldwide,” they said.

Latest Fertilizer and Pesticide Authority data showed that prevailing prices of  most major fertilizer grades nationwide have increased on a weekly basis.

The prevailing price of urea (prilled) hit P1,672.35 per 50-kilo bag, up from P1,666.88, while urea (granular) rose to P1,650.31 from P1,642.14.

Meanwhile, the prevailing nationwide price of complete ferilizer increased to P1,638.89 per 50-kilo bag from P1,637.22 on a weekly basis.

In a blog post, International Food Policy Research Institute research fellow emeritus Joseph Glauber explained that fertilizer prices would spike this year due to supply disruptions especially the closure of the Strait of Hormuz, wherein about 20 to 30 percent of global fertilizer exports pass through.

Furthermore, declining shipments of natural gas, a feedback for nitrogenous-based fertilizers, would also push up prices of the planting input, Glauber said.