Regional fertilizer sourcing to cut exposure to volatile Gulf supply

The Department of Agriculture (DA) said nearby countries are viable alternative sources of fuel-derived fertilizer that can reduce dependence on the Middle East.

In a statement Wednesday, the DA said exposure to Middle Eastern fertilizer is at any rate limited to about 20%, with most imports coming from China, Indonesia, Malaysia, and Vietnam.

Iran restricted passage through the Strait of Hormuz, a key chokepoint for oil and inputs such as urea and phosphate, after the US and Israel attacked it in late February.

The DA said ammonium sulfate shipments come entirely from suppliers in Eastern Asia.

“I reviewed all the figures on where our fertilizer comes from. Supply is not the issue — it’s really the price,” Agriculture Secretary Francisco Tiu Laurel, Jr. was quoted as saying in the statement.

The DA said rising global oil prices and freight costs are expected to push fertilizer prices higher, which could in turn drive increases in food prices.

Fitch Solutions unit BMI earlier warned that rising fertilizer prices are leading to reduced fertilizer application across Southeast Asia, with the Philippines particularly vulnerable due to its heavy reliance on imports.

“The Philippines is more fundamentally exposed to an extended disruption to nitrogenous fertilizer supplies given its high reliance on imports,” BMI said.

It added that delays in fertilizer shipments could coincide with key planting periods, posing risks to crop yields.

“With approximately 75% of corn plantings occurring between April and May and around 60% of rice plantings taking place from March to May, delay in fertilizer arrivals past key application windows could pose significant downside risks to the upcoming crop,” it said.

To mitigate the risks, the DA said it is promoting alternative inputs such as biofertilizer, liquid fertilizer, and soil ameliorants, while continuing to diversify import sources.

Among these alternatives are locally-produced biofertilizers developed by researchers from the University of the Philippines Los Baños National Institute of Molecular Biology and Biotechnology and manufactured commercially by Agri Specialists, Inc.

The company estimates that one kilo of the product can replace up to two 50-kilo bags of urea-based fertilizer. The biofertilizer costs about P750 per kilogram, compared with around P2,500 for a single bag of complete fertilizer.

The DA said field trials indicate that farmers can reduce their use of conventional fertilizer without significantly affecting yields when using such alternatives.

“If you used to apply 10 sacks of urea, you might now be able to use only half or even just three (sacks of the alternative fertilizer),” Mr. Laurel said. — Vonn Andrei E. Villamiel