First Order of 8,000 Tonnes of Fertilizer This Week

Minister of Agriculture, Dr. Christopher Tufton has informed that the first order of eight thousand tonnes of fertilizer would be made this week, at a cost of $300 million.
“Arrival of this shipment is expected within six weeks. The Government has already commenced discussions with the distributive trade, regarding the management of the logistics of the product reaching the farmers,” Dr Tufton said at a press briefing, held at the Ministry’s Old Hope Road offices in Kingston today (August 7).
He pointed out that the Government intends to monitor the distribution, to ensure that farmers benefit from the best possible prices, and as such, the Ministry of Industry, Investment, and Commerce would handle the importation and distribution.
“We anticipate that a mark up will be put on the fertilizer and we have factored that into the equation. There is, however, an issue as it relates to the retails; it is difficult, because there are so many, to monitor the retail trade in a way that would perhaps encourage reasonable margins,” Dr. Tufton said.
“We are going to have to use the Rural Agricultural Development Authority (RADA) as well as the Ministry of Industry, Investment, and Commerce to monitor those prices. The intention is to provide information to the farmers, through the mass media, on where these prices in our consideration are reasonable and where they are not,” he added.
In July 2008, a report was prepared by the Ministry of Agriculture to examine the factors contributing to the high fertilizer prices locally. The report also compared the fertilizer prices locally with those of other Caribbean territories, such as St. Vincent and the Grenadines, Barbados, Trinidad, and Guyana.
“An analysis of this report shows that in territories which imported fertilizer, retail prices were lower in the main than the ex-factory prices at Newport-Fersan and lower in every instance than our retail prices in Jamaica,”
Dr. Tufton explained. Newport-Fersan is the only manufacturer of fertilizer in Jamaica.
He further explained that an analysis was carried out on the ex-factory prices of the four main fertilizer types, and the total Cost, Insurance, and Freight (CIF) value and other charges, to ascertain the manufacturer’s differential in production cost and mark-up.
“This differential ranged from a low of 30 per cent on Sulphate of Ammonia to a high of 43 per cent on Urea. The average differential on these four fertilizer types is 39 per cent. The data used in the calculation of the differential was provided to the Ministry by Newport-Fersan,” Dr. Tufton said.
“For these reasons, the Government announced its intension to enter the market to import 25,000 tonnes of a range of fertilizer blends for the local market until the end of this calendar year,” he added.
Meanwhile, Dr. Tufton announced that at the 5th Extraordinary Petro Caribe Summit, held in Venezuela, President Hugo Chavez gave Jamaica a discount of 40 per cent on the prevailing market price on Urea, based on an agreement that this discount is passed on to the farmers.
“The Government, therefore, intends to proceed with this agreement to ensure that the process is transparent. Discussions have begun with Newport- Fersan to determine a possible arrangement for the handling and distribution arrangements of this offer from Venezuela. Newport-Fersan has indicated that this will result in a 36 per cent reduction in the ex-factory price of Urea,” Dr. Tufton said.
Urea is only one of four raw materials that make fertilizer, and only those blends with a significant percentage of Urea will benefit in an appreciable way.
Sugar cane farmers will be the main beneficiaries of this subsidy, as Urea is mainly used in fertilizer blends such as 17-0-17, 18-9-18, 22-0-22, 23-10-20 and 26-0-26. The prices of these blends will be reduced by a range of 8 per cent to 18.6 per cent.