Looming fertilizer shortage

In our discussion of the current rice crisis, Commodore (ret) Rex Robles tells us of the three legs of the national security tripod: food, fuel, fertilizer.

We are now burdened with the rising prices of food and fuel. Here comes the information of a looming fertilizer shortage.

The info was shared with us by a businessman who subscribes to assessments of a Hongkong-based risk consultancy firm.

Here’s a summary of the report:

“The role of fertilizers in the production of rice and corn cannot be understated — less fertilizer means lesser yield; conversely, proper fertilization brings about optimum yield. Simply put: enhancing agricultural productivity is a function of farm inputs, foremost of which is the use of fertilizer.

“The World Situation. The current instability in the supply of fertilizer products and the concomitant surge of its prices can be attributed to the following series of developments, principally involving China:

“Before 2000 – China did not have the enough capacity to manufacture fertilizers. It was a major source of cheaply-priced raw material, specifically phosphate rock, and was a major importer of finished phosphate fertilizer products from the United States.
“2002 – China’s large fertilizer plants were completed and became operational. China reduced its importation of finished phosphate fertilizer products, while increasing its importation of raw materials, specifically sulphur. It became the world’s largest importer of the said material by 2005. Chinese phosphate rock became unavailable to the world market when the Chinese government removed railcar allocation for the transport of phosphate rock to the ports which are 1,000 kms. away.

“With China’s Sulphur consumption cornering 30% of the global supply, prices were driven from $25 in 2002 to $750 per metric ton in 2008, and causing a severe shortage in the world supply. Sulphuric acid, on the other hand, went from $0.00 to $220 per metric ton at today’s level.

“By 2004 – China metamorphosed into one of the largest exporters of Phosphate fertilizer products, forcing major fertilizer manufacturers in the world to bankruptcy. This removed about 6.5 Million tons per annum of world fertilizer capacity.

“2005 to 2006 – The rapid growth of the biofuel industry created an enormous demand for Phosphate fertilizers;

“December 2007 – China announced an imposition of a 35% tax on fertilizer products effective February 2008, principally to curtail the outflow of fertilizer products and assure its domestic supply due to its increasing requirements.

“January to February 2008 – Severe winter in China resulted in major power outages that forced fertilizer plants to shut down for almost 2 months, thereby, compelling China to declare a 3-month ban on exports of fertilizer products beginning April 1, 2008. Chinese fertilizer producers will not honor delivery commitments.

“The Philippine Situation.The total annual fertilizer requirements of the Philippines amount to 700,000 metric tons for NP/NPK and another 800,000 metric tons for urea and ammonium sulfate. These four components are required for a balanced fertilization. NP/NPK and ammonium sulfate are produced locally while Urea is imported totally.

“There are three NP/NPK producers in the Philippines, Philippine Phosphate Fertilizer Corp. (PHILPHOS), Atlas Fertilizer Corp. (ATLAS) and Soiltech Corp. (SWIRE), with a combined capacity of 1.4 million metric tons per year.

“Because of the worldwide shortage of Sulphur/Sulphuric Acid/Pyrite ( raw materials of PHILPHOS ), and DAP, ( raw material of ATLAS and SWIRE and one of the main products of PHILPHOS ) the industry will only be producing 25% of the total NP/NPK fertilizer requirement for the April to August 2008 planting season. This, together with 25% current inventory and 10% imports, will add up to only 60% of the total Philippine NP/NPK fertilizer requirement for April to August 2008.

“Although there will be sufficient supply of urea and ammonium sulfate, the 40% deficit of NP/NPK fertilizer requirement for the coming planting season will substantially affect the rice and corn production production of the country.

“Proposed Solutions. The following action plans are proposed to address the impending fertilizer shortage in the coming April to August 2008 planting season:

“1. Temporarily Disallow, at least for the next Six (6) months period, the export of raw materials used in fertilizer production, such as Pyrite, Sulphur, and Sulphuric Acid;

“2. Direct the country’s primary fertilizer producer, PHILPHOS, to supply the raw material requirements of secondary producers, ATLAS and SWIRE in order to maximize fertilizer production and distribution;

“3. Direct the Department of Agriculture (DA), Department of Environment and Natural Resources (DENR), and other relevant Government agencies to assist the industry in availing alternative sources of raw materials, i.e.., fast track issuance of mining permits for pyrite and sulfur.

“4. Direct the fertilizer industry to maximize its production so that the volume produced in excess of the domestic demand could be used by the Government as leverage for buying rice and corn from countries ( i.e. Vietnam and Thailand) who also badly need fertilizer for their domestic production.

“5. Direct Government Financial Institutions, such as the Development Bank of the Philippines (DBP), Land Bank of the Philippines(LBP), United Coconut Planters Bank (UCPB), Trade and Investment Development Corporation of the Philippines (TIDCORP) to support the fertilizer manufacturers, importers, dealers, distributors, or cooperatives by increasing its exposure for additional working capital. With the 300% increase in fertilizer prices, existing credit facilities are no longer sufficient to finance the same volume as last year. Adequate credit lines will ensure timely and efficient distribution of fertilizer to the farmers.”

There is no doubt about the importance of fertilizer in rice production. As we try to cope with the impending rice shortage, we rage at the misuse of over P1 billion which was supposed to go to farmers for their fertilizer needs which instead went to buying of votes for Gloria Arroyo in the 2004 elections. Jocjoc Bolante, the agriculture undersecretary who engineered the diversion of funds would not have been able to do that without the approval of Gloria Arroyo.

April 23, 2008 12:30 am   Posted in: Malaya, rice crisis

29 Responses

  1. bitchevil - April 23, 2008 12:44 am

    Get Joc Joc Bolante and make him accountable for it! Tell him to name all the culprits of this wide scale scandals now destroying the country and making the poor people suffer more!
    Ask the US to bring that ass hole back to us!

  2. cocoy - April 23, 2008 4:06 am

    With oil and gasoline touching all-time high, raging energy-price fever showed no sign of breaking. Before it’s over, oil could cost at least $125 a barrel and gasoline more than $4 a gallon.People are not bother, they usually would buy from whatever station was closest when there tank started to run low.Same as these prices of fertilizer,the farmers will buy no matter how much it cost because they need it to boost their harvest.

  3. TonGuE-tWisTeD - April 23, 2008 7:12 am

    Fertilizer is just one of the present concerns of the Palay farmers. In fact, they are problematic with ALL THE INPUTS

    Seeds, the high end variety that is, I am told have been missing since there are tons of Gloria’s “hybrid” variety rotting away in some NFA warehouse government is pushing Central Luzon farmers into buying. The natural course is that the regular seeds will demand higher prices OR they buy the cheaper but riskier hybrid which, when attacked by virus, kills wide tracts of palay-planted farms in a matter of days.

    Next, irrigation. Farmers have been complaining about the cost of electricity used to pump water into their fields. At P9,000 per hectare, this amount reflects very high energy cost per hectare compared to our neighboring countries. Fuel price increases is one of the culprits here. Another is the incompetence of Napocor in managing its assets that is pushing maintenance costs sky-high thus, more expensive power.

    We go now to fertilizers. Sulfur and pyrite (fool’s gold) are abundant but unmined. Sulfur mining in particular has been somewhat restrained after 9/11 since large volumes of sulfuric acid may be considered WMD. We have huge stocks of Nitrogen, Phosphate and Potassium. Especially phosphate, since we have the whole phosphate rock-island Republic of Nauru supplying us with the raw materials should our own resources get depleted. Hey, we have even convinced them to relocate in that building at the corner of Buendia and Makati Ave. should the 5,000-man island-nation sink down the Pacific due to over-quarrying. We have Joe Concepcion, as Cory’s Trade Secretary, to thank for (for once) for securing our phosphate supply for at least half a century. I don’t understand why we have a shortage in urea, though. Putting plastic containers in Bayani Fernando’s disgusting pink urinals all over the Metro would be enough to gather urea raw materials. I think.

    Post-harvest. The same effects that the high cost of energy have on the service charge of paddy hullers, dryers, separators and polishers. I won’t be surprised farmers would go back to the primitive bilad-bayo-tahip method just to make a modest return. We can also include here the cost of renting hand-tractors or even just the cost of maintaining one, if they own it. Or cheaper still, get a carabao!

    Ditto for transporting the crops.

    What this all sums up to is a gi-mongous cost increase in rice production amidst a steady NFA buying price of P14.00.

    The farmers won’t survive in this situation. I’ve just been to Subic the last weekend and judging by what I saw all throughout Bataan, Zambales, Pampanga and Bulacan, the farmers are in no hurry to prepare the soil for the May planting season. They’d probably wait for the rains before plowing and harrowing to save on tractor rental and irrigation cost.

    Wow! We’ve just been teleported back to the 19th century!

  4. chi - April 23, 2008 7:12 am

    Shortage of credibility, shortage of rice, shortage of fertilizer, shortage of fuel, shortage of jobs, shortage of H20, shortage of family planning program, shortage of viable programs for the poor, amongst other shortages.

    Puro shortage na lang ang nangyayari sa fake government ni shorty bitch in bringing service to the public.

    And yet, sobra naman ang excesses…plunder, corruption, abuse of power, extra judicial killings and forced disappearances, lying, stealing, cheating, at etc. pa…

  5. Valdemar - April 23, 2008 7:26 am

    What happened to the organic farmers. Lets really go organic. We have a lot of organs producing wealth of fertilizers that only goes to the sewerage. Thats what is happening in Trinidad Valley, I was told. In fact they do it, too in the US. Many were poisoned lately with their vegies. Must be wrong organs and wrond methods.

  6. Ellen - April 23, 2008 7:34 am

    Thanks, Tongue, for the additional info.

  7. TonGuE-tWisTeD - April 23, 2008 8:29 am

    For a regional view on the fertilizer outlook, check out this PDF file.

  8. Valdemar - April 23, 2008 12:11 pm

    I saw it on the tv, Nauro doesnt exist anymore. It was corrupted.

  9. george - April 23, 2008 2:11 pm

    Joc-Joc Bolante, the man responsible for the the misuse of approximately one billon pesos supposedly for farmer’s fertilizer fund is currently at an immigration detention center in the United States. If my memory serves me right, he was detained after the senate cancelled his passport, thus rendering the status of his visa entry in the United States nil. What is keeping this person from standing trial in the Philippines? The Philippines has a standing extradition treaty with the United States government. I believe the senate has formally endorsed a request for his extradition. What’s keeping it up? Is gloria really that influencial that she could pull strings and prolong Bolante’s detention at the U.S. immigration? I think now is the perfect time for the opposition to pressure the United States immigration to turn over Bolante to the Philippine authorities to stand trial. The consequence of what he has allowed Gloria to do with the fertilizer fund have put millions of Filipinos in a desperate situation.

  10. grizzy - April 23, 2008 2:33 pm

    Yup, hindi naman kailangan ang mga expensive fertilizers sa totoo lang. I remember when I was a little girl, there was the Chinese garden n our neighborhood.

    Golly, ang amoy when you pass by that place! There was also a kankungan nearby with a public toilet beside it, and the China man going to collect the pails there in the morning.

    No wonder, though, that my mother never learned to eat raw vegetables!

  11. grizzy - April 23, 2008 2:42 pm

    Just now, CNN has reported that one of the cause of the food crisis worldwide and the British getting worried that there are people there now wanting the biofuel program to be declared illegal while in the Philippines you have idiots like the Pidals and their runner, Zubiri, pushing for it.

    Abangan iyan. My friend in Negros is right when she says that the farmers there have a lot to worry, especially those promised of getting the Pidal lands the idiota promised to give for land reform. The farmers I am told are being forced to plant sugar canes and corns that they need to sell at low price to the Chinese being given rights to monopolize the production of biofuel in the Philippines, plus the lands we are told will be leased to the favorites Chinamen of the Pidals for the Chinese to produce the corns and sugar canes plus other plants they export overseas.

    Worse is when the greedy Pidals peddle these business deals with the Chinese as beneficial to the Philippines and the Filipinos. Lalong gutom ito not just for the Filipinos but for all peoples of the world. Heaven forbid!

  12. dizonlea - April 23, 2008 2:50 pm

    I think the country has an ample supply of sulfuric acid as this comes from the copper smelter plant in Leyte as a by-product . In the past years, the smelter plant got a problem for how to dispose too much sulfuric acid as storage became a problem.
    As for elementary sulfur. this is also available from the oil refinery like shell and petron. this is a by-product of “sweetening” of the different distillates like gasoline, diesel. The country I don’t think has mined grade sulfur but still imports it for stop gap requirement from abroad. One of the major manufacturer here of the acid is RI located in Pasig.

    As for fertilizer component
    Urea can be derived from Malampaya natural gas. why does this country has to export the natural gas to like Korea to make Urea and import the same. Transporting compressed gas is very costly. As long as the country can ” moderate the greed ” of the malampaya consortium then the whole project would be feasible.
    Malampaya gas can also replace LPG for cooking and also ethanol via the synthetic route which is cheaper than the biomass ( molasses, cassava etc ) route. Methanol can also be derived here ( a basic component for making biodiesel ).

    As for the potassium in the ferilizer ( NPK ) this we cannot do anything but import it. The good thing is 2 out of 3 components in fertilizer can be made here.

  13. MrG - April 23, 2008 4:48 pm

    The high cost of sea transport for ALL farm inputs adds to the uncompetitive cost to produce rice. A major source of this high cost is cargo handling which was measured at about 40% of the total sea transport cost. After all, the sea transport industry in the Philippines is not capital intensive but labor intensive. Of course, the port authorities have their own share in the 40%.

  14. grizzy - April 23, 2008 5:54 pm

    Philippine senators should not be listening to Zubiri and pseudo-scientists that the Pidals will try to present to hoodwink everyone that their biofuel project with the Chinese will be beneficial to the Filipinos.

    They should listen more to much more reliable and eco-conscious scientists who are sounding off the warning regarding this new racket about energy production that is depriving millions of hungry people around the world of food.

    We are hearing of the attempt now to produce more corn in the Philippines. Don’t believe the liars at the palace by the murky river. You can bet your bottom dollar it is not aimed at feeding hugnry Filipinos when the rice is gone, but for the biofuel something that they have instsructed Zubiri to push through in the Senate.

    Iyan ang dapat na pag-ingatan din. Patalsikin na, puede ba?

  15. Valdemar - April 23, 2008 7:04 pm

    George,
    Di lang naman mga Filipno ang maaring may lagay. Ano sa akala mo sa mga Amercano. Continuous parin ang pera na pinapadala kay Joc-Joc tulad yun pinapadala kay Lozada habang nasa abroad. May paipit din sa import fund sa US rice para kay Jocjoc. Sarap talaga ang magkasala kung nasa gobierno.

  16. Valdemar - April 23, 2008 7:20 pm

    Its not the fertilizer that is the problem. Its the CARP. They dont need fertilizers, they dont till the lands anyway. Today they march to dramatize the need to extend the CARP. Another extension of our miseries! I am pretty sure there wont be any extension. The president wont certify the bill as important. Its more important they dont get a second shot at the Arroyo haciendas.

  17. dizonlea - April 23, 2008 7:57 pm

    even Myanmar, has a vision on how to fully utilize its natural gas for the production of urea, polyester and extraction on LPG. why export when it can be used for downstream petroleum projects. See http://www.energy.gov.mm/MPE_2.htm
    Producing urea and subsidizing it helps filipino farmers and increase rice production

  18. chi - April 23, 2008 8:40 pm

    Based on the posts of dizonlea, she knows where’s she’s coming from with regards to fertilizer. If we take into consideration the vast info she shared here, the real problems boil down to lack of government information/education program and budget, of course; and again it’s easier to import fertilizers for the primary reason of commission. Imagine, only NPK we can’t do anything about, the rests Pinas has ample supply.
    ***
    Go organic ako, I create my own compost for my veggies planted in paso and in the tiny portion of my backyard. But this is nothing compared to planting rice that needs fertilizer for a bounty harvest.

  19. chi - April 23, 2008 8:41 pm

    Ang bitch kaya ang gawing fertilizer!

  20. grizzy - April 24, 2008 3:42 am

    Sinabi mo pa, Chi. My in-laws plant their own veggies. Ang dami ko ngang supply ng patatas sa totoo lang. My sister-in-law, a Home Economics teacher, use kaning baboy that she keeps not for the pigs because she is not breeding any, but to mix with the soil to make it fertile.

    Problema naman sa Pilipinas ngayon, as what we have shown in our documentary in February this year for some TV network here, walang magawang kaning baboy iyong poor farmers sa Pilipinas kasi wala na nga silang makain na mga tao, sayangin pa nila.

    Kawawa talaga di gaya ng mga farmers dito sa Japan. Successful iyong land reform na in-implement ng mga kano when they occupied Japan briefly. Dapat ginawa din ng mga kano iyan sa Pilipinas bago nila binigyan ng independence.

    Kawawang Pilipinas talaga!

  21. grizzy - April 24, 2008 3:43 am

    ….Correction, “My sister-in-law, a Home Economics teacher, uses kaning baboy…

  22. grizzy - April 24, 2008 3:57 am

    Iyong pamilya na na-focus sa documentary namin, kawawa talaga. Kasama iyong ama at mga kamag-anak doon sa grupo na nagsusulong ng CARP kaya inaapi ng mga landlords nila. Iyong pinakalider nga na kamag-anak nila pinatay ng mga sandatahang mama na binayaran ng haciendero. Iyong mga lumalaban naman sa Maynila, nakakatikim din ng batuta ng mga pulis. Ganoon ang isa sa mga paghihirap nila na tatawagin pang mga komunista daw.

    Problema ang daming anak. 18 years na ang panganay na mamang-mama na at tapos lang ng elementary school. Iyong anak na babae, matalino at gusto ko sanang tulungang makatapos ng pag-aaral para maiahon ang pamilya. Iyong pinamaliit sanggol pa. Iyong ina wala pa yatang 40 pero matandang-matanda na ang itsura.

    Ang dami kong natutunan sa mga interview na ginawa ng crew namin na isinalin ko sa wikang hapon para sa paglalagay ng mga subtitles sa documentary. Kaya pag naririnig ko ang balita tungkol sa nagyayari sa mga protesta nila sa DAR, etc. nai-imagine ko ang paghihirap nila lalo na ngayon.

  23. Valdemar - April 24, 2008 7:30 am

    Quezon wished we live among crooks and crocs rather than live with honey and money. He blew it. No American CARP.

    dizonlea,
    The Myanmar model is quite appropriate although a little late. Lets hope our own dictatorial government make use of our refinery plants in Batangas and Bataan to make fertilizers. But not to fertilize pockets.

  24. grizzy - April 24, 2008 9:42 am

    Valdemar:

    IMHO, wala namang masamang intention si Quezon when he quoted that phrase about the country being run like hell by Filipinos dahil hindi naman niya akalain tototohanin nila.
    😛

    Sabi nga ng nanay ko matitino naman ang mga pilipino noong bago mag-WWII. Nasira lang sila noong pagkatapos na ng guerra na pinabayaan ng mga kano na babuyin mismo ng mga pilipino ang bayan nila. Nawalan ng disiplina nang payagan mismong mga kurakot at magnanakaw, lalo na iyong mga kilalang landgrabbers, ang magpalakad ng bansa since 1946 na hindi naman naituwid ng mga EDSA-EDSA kasi corrupt din naman ang mga namuno gaya noong paring sobrang makasalanan na ni-rectify ang pangalan!!!

    Ngayon, problema ay kung gaano pa katagal magtitiis ang mga pilipino? Mawawala na nga ang bansa nila, hindi pa tumitinag e.

  25. grizzy - April 24, 2008 11:18 am

    This reminds me of the Biblical quote as when Christ said, ” Ye shall know them by their fruits. Do men gather grapes of thorns, or figs of thistles? Even so every good tree bringeth forth good fruit; but a corrupt tree bringeth forth devil fruit.” (Matt.7:16-17)

    Iyan ang mga nagpalakad ng EDSA. Buti na nga pinasara na!

  26. grizzy - April 25, 2008 12:51 pm

    There is rice shortage everywhere kaya ano ang sinasabi ni Gloria Dorobo na walang rice crisis when the Philippines cannot even produce enough to feed the Filipinos? Gutom na ang mga pilipino, nagyayabang pa si unano. Sipain na ang bobong iyan!

  27. grizzy - April 25, 2008 12:59 pm

    Hopefully, Japan will keep its supplies for its own people’s consumption

    I, myself, have planned to buy a year’s supply of rice just to be prepared in case the world experiences a famine.

    In accordance with the admonition of leaders of our church in fact, like members of our church around the world, even in the Philippines, I’ve kept a food storage that will last my husband, son and myself for at least three months until now.

    I have kept kilos and kilos of spaghetti because it is less space consuming. I can serve it alternately with rice.

    Truth is I doubt if I can live without rice. I realized that when I was in Europe (UK). Nagsawa ako sa chips and beans. First time kong nanaginip ng kanin when I was there.

  28. TonGuE-tWisTeD - April 26, 2008 9:26 pm

    dizonlea says:
    even Myanmar, has a vision on how to fully utilize its natural gas for the production of urea, polyester and extraction on LPG. why export when it can be used for downstream petroleum projects“.

    If they sell it directly to the local market, there’s only one transaction. Only one opportunity to make a cut.

  29. TonGuE-tWisTeD - April 26, 2008 9:33 pm

    MrG Says:
    The high cost of sea transport for ALL farm inputs adds to the uncompetitive cost to produce rice. A major source of this high cost is cargo handling which was measured at about 40% of the total sea transport cost. After all, the sea transport industry in the Philippines is not capital intensive but labor intensive. Of course, the port authorities have their own share in the 40%“.

    Which again proves that under this regime of regulatory capture, only the most favored cronies corner the most profitable transactions with, or with the help of, gov’t.

    We will never be a competitive industrial producer nor will we be a major agricultural exporter. Leaves us only with human exports, doesn’t it?

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