FOOD PRICES are expected to reflect the impact of the fertilizer crisis as early as the third quarter, via increased costs of the input for growers of crops for human or animal consumption, a private-sector executive said.
“We were calculating maybe by the third or fourth quarter, you will see the full impact of the fertilizer spike on food pricing and protein pricing,” Jose Rene D. Almendras, private sector representative to the Legislative-Executive Development Advisory Council, told the Money Talks with Cathy Yang program on One News on Tuesday.
He said it will take a few months before the rise in fertilizer prices shows up in food prices.
“The price of the urea, which was at about P400, is now going towards P800, and the farmer that buys that fertilizer will now charge more for his produce, which eventually will be used for feed. So that’s going to take a few months.
Fighting around the Persian Gulf has disrupted the supply of fertilizer, affecting farm production costs, IBON Foundation Executive Director Jose Enrique A. Africa said.
“The US attack on Iran is causing a systemic price shock on food systems not just through oil prices but also through fertilizer, and these are being transmitted through the country’s overly import-dependent energy and agricultural systems,” he said via Viber.
Fertilizer production is energy-intensive as it relies mainly on natural gas as feedstock. The Middle East is a key producer of fertilizer.
“The pass-through of price shocks will be aggravated if marginal rural producers stop producing, and cause localized supply gaps to aggregate to regional and national shortfalls,” Mr. Africa added.
Danilo V. Fausto, president of the Philippine Chamber of Agriculture and Food, Inc., said shipping and logistics costs also will drive up food prices, which will likely manifest in the coming months.
“Replenishment of inventories by food manufacturers will result in increased prices due to high cost of raw materials,” he said via Viber.
Boat fares and ship cargo rates have been allowed to rise as much as 30%, the Maritime Industry Authority said in March.
Mr. Fausto also cited the need to provide targeted support for farmers in light of the upcoming planting season this May. — Beatriz Marie D. Cruz
