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Fertiliser prices soar

FLASHBACK—People wait for subsidised fertiliser

VOLATILE—Fertiliser prices

The government should brace up to pay more for fertiliser this year, as the global meltdown due to the Covid pandemic and the Russia-Ukraine war have combined to militate against fertiliser prices.

Spot-checks The Daily Times conducted in agro-dealer shops revealed that, already, fertiliser prices have risen by an average of K12,000 per 50 kilogramme (kg) bag.

At one shop in Kasungu District, a 50kg bag of NPK fertiliser was selling at K45,750 from K39,000 while a 25kg bag of the soil-enriching commodity was selling at K26,500 from K15,700.

One of the workers there told us that the new prices became effective on Wednesday, April 6 2022.

“It is true that prices have gone up. We are selling a 50 kilogramme bag of fertliser at K50,000 while a 25 kilogramme bag is going at K25,000. The reasons for the raise should be obvious but it is not something that we can discuss in the papers,” he said.

In Limbe, Blantyre’s commercial hub, a 50kg bag of NPK fertiliser was selling at K46,200 in one of the shops, with a 25kg bag fetching K27,200.

However, Fertiliser Association of Malawi Chief Executive Officer Mbawaka Phiri said they had not yet received official communication from their members about the changes but said such changes were expected.

“Well, we may find out about that if we check in the shops but it’s not surprising if that happens because fertiliser prices have gone up globally due to a number of factors. As such, this is expected,” Phiri said.

Farmers Union of Malawi President Frighton Njolomole has, meanwhile, challenged the government to do something about the matter.

“The average smallholder farmer in Malawi may not afford the new prices and this may also affect subsistence and commercial crop production in Malawi, which will have a direct impact on the already ailing economy.

“The situation is pathetic and, in saying so, I am not just thinking of our members but indigenous Malawians who depend on farming as well as small-scale farmers. This means they will have to be spending a fortune. Lucky are those who may rely on bank loans but even such loans are not accessible to everyone and, by the next farming season, chances are that prices will have gone up again,” Njolomole said.

He proposed that the government should encourage farmers to invest in organic fertiliser using expertise that the country has.

Agriculture Minister Lobin Lowe and the ministry’s spokesperson Gracian Lungu were not readily available for a comment.

When contacted, Principal Secretary for Agriculture Sandram Maweru asked for a questionnaire, saying: “I have knocked off. I don’t usually respond to questions. Send them to Gracian Lungu, who is on his way from Egypt and then we will help him respond to you.”

Ahead of his election on June 23 2020, President Lazarus Chakwera promised that farmers would be buying a 50kg bag of fertiliser at about K5,000.

In the 2021-22 financial year, the allocation for Affordable Inputs Programme (AIP) was K142 billion; however, the 2022-23 budget for the same has been put at K106 billion.

In July 2021, the ministry announced a reduction of beneficiaries from 3.7 million to 2.7 million, citing financial constraints and rising fertiliser prices, only for President Lazarus Chakwera to reverse the decision.

However, according to a Food and Agriculture Organisation (Fao) of the United Nations report, titled ‘The Global Fertiliser Market: Taking Stock of A Tightening Market Situation’, prices for the commodity have been rising the world over.

It indicates that the most notable increases have been registered for nitrogen (N) fertiliser, with prices for urea, a key N fertiliser, more than trebling within 12 months.

“Prices for phosphorous fertiliser (P) have risen in tandem. Those for diammonium phosphate, or DAP, a key composite P fertiliser, have doubled from $360/t to $726/t over the same period. Clearly, the price increase for DAP fertiliser also reflects higher prices for the N-component. There was, however, also an equal effect from higher P-fertiliser prices, which is estimated to have accounted for about 50 percent of the overall increase in DAP prices. On the other hand, prices for potash (Kfertiliser), remained less affected over the past 12 months,” the report reads.

It cites the Covid pandemic among the influencing factors.

“In response to rising global demand for fertilisers and rising domestic prices, a number of key suppliers have responded with export restrictions placing further upward pressure on international fertiliser prices. Concerning transportation costs, the Covid pandemic has caused widespread disruptions in international supply chains, resulting in higher freight costs and longer transit times. Prices for bulk and container shipments saw marked increases until September 2021,” it reads.

International media was Wednesday awash with reports that fertiliser prices have broken records as importers are negatively affected by such factors as reduced upplies from Russia and Belarus, disruptions to the supply chain, a rail strike in Canada and an export ban imposed by China.

Josh Linville, the director of fertiliser at the US commodity trader StoneX, told The Guardian of The United Kingdom that the Russia-Ukraine conflict had exacerbated matters..

“It’s a series of events we’ve never seen before and it continues to look like it’s going to get worse than better,” he is quoted as saying, adding “People thought the Russia-Ukraine war would be quick and Russia would be back out in the market and that’s not been the case.”

Fao and organisation that focus on agriculture have indicated that raw materials that make up the crop nutrient commodity market –ammonia, nitrogen, potash, urea, phosphates, sulphates and nitrates– have risen 30 percent since January 2022.

And there are indications that Malawi will bear the brunt of events taking place on the global stage, a development that is likely to affect the one million beneficiaries of the AIP.

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