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Parliament faces fertiliser dealers

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SULEIMAN—We are not
convinced

The Agriculture Committee of Parliament Tuesday faced local fertiliser dealers and lamented the rising prices of the commodity.

The committee says it would engage the government on possible alternative modalities of importing fertiliser to help bring down the price.

The options include using Admarc and Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRM) who have assured that they could get fertiliser into the country at a cheaper price than the current market price.

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Among other players, the committee summoned the Fertiliser Association of Malawi and SFFRFM.

Chairperson of the Committee Sameer Suleiman said they were not convinced that global trends have triggered a sharp rise in fertiliser prices.

For instance, in early June, a 50-kilogramme bag of fertiliser was being sold between K21, 000 and K23, 000.

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Currently, the commodity is being sold at between K36, 000 and K40,000 representing a 73.9 percent rise.

Figures that we have seen from www.theglobaleconomy.com show that in June, Urea fertiliser was selling at $393.3 per metric tonne while in July the price went up to $441.5 per metric tonne. This represents a 12.2 percent increase in prices.

Suleiman told reporters that it was strange that prices on the local market jumped abruptly in July when suppliers had stocks of fertiliser from last year.

“Farmers are going to be heavily burdened by the increase in fertiliser prices. We have said it before and we will continue to say that we need regulations on fertiliser prices and we are pushing to have the Fertiliser Bill in the next meeting of Parliament.

“There is no way a Malawian will afford fertiliser at K40,000. For example, if you apply two bags of fertiliser to your field you will only be able to harvest 7 bags of maize which doesn’t make sense to go to the field anymore,” Suleiman said.

Fertiliser Association of Malawi Chief Executive Officer Mbawaka Phiri maintained that international prices had increased due to various reasons including increased cost of raw materials to make fertiliser, manufacturing and logistical bottlenecks due to Covid, oil and gas price increases and increased demand.

She added that, in the context of Malawi, the above, coupled with the depreciation of the Kwacha against the dollar, worsened the situation.

“The price is controlled by market forces. The only way the price can be reduced is by changing these market forces, most of which are beyond our control. The government could look into reducing costs that are imposed on companies once the fertiliser enters the country.

“The global price is not the only factor to consider as the exchange rate and logistics costs also play a role. Malawi is a landlocked country and the cost of bringing the fertiliser inland has to be considered. The exchange rate and availability of US dollars also play a role. Therefore, the bottom line will always be higher than international prices,” Phiri said.

Meanwhile, agriculture experts have indicated that the government needs to increase the number of farmers to benefit under the Affordable Input Program (AIP) to avert devastating impacts of the rise in fertiliser prices on the sector, let alone the economy.

In an interview, local commentator Tamani Nkhono Mvula said, if the situation were not checked, a lot of Malawians would need food aid next year.

He further said companies involved in production of agriculture-related products will also be affected.

“There is little that the government can do mainly because the situation is emanating from global supply chain trends due to the Covid pandemic. We should have special contracts with fertiliser-producing companies to import the fertilisers early around January when demand is low.

“We should also look at establishing fertiliser manufacturing companies in the country in the long term to avoid such situations in future,” Mvula said.

In a separate interview, Leonard Chimwaza said there was a need for the government to empower the Agricultural Development and Marketing Corporation (Admarc) and SFFRFM to be able to import the commodity for sale at cheaper prices.

“The companies that import fertiliser are aware that, whether we like or not, we will buy the fertisers at such high prices because there is no alternative but if Admarc and SFFRFM were to sell at reduced prices, these traders could have been forced to reduce their prices,” Chimwaza said.

Civil Society Agriculture Network Executive Director Pamela Kuwali said that, in the short term the government and stakeholders need to urgently collaborate to explore ways to support both small and medium farmers that are not on the AIP list to access fertiliser.

“One way would be to facilitate access to fertiliser for farmers through ensuring that farmers are able to get financing for inputs; for example, through affordable loans. There should also be massive campaign on conservation farming practices,” she said.

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