Rice on the verge of soaring as fertilizer rally pushes up farm costs
(Bloomberg) – Massive fertilizer upturn is coming for rice, a staple food for half the world’s population, as farmers at one of the world’s leading exporters brace for sky-rocketing prices for crop nutrients over the course of the next planting season.
Bloomberg’s Most Read
The cost of fertilizers in Thailand is set to double from 2020, with prices now at 16,000 baht ($ 480) per tonne from an average of 10,000 baht last year, according to Pramote Charoensilp, chairman of the Thai Farmers Association, which represents rice farmers. in the third largest shipper worldwide.
âIt will be a problem for rice farmers in the coming months. Many of them have already harvested last season’s rice and are getting ready to plant, so they will need fertilizer, âPramote said in an interview on Tuesday. âA ton of fertilizer is now more expensive than a ton of rice.
Rice is a staple food in many Asian countries, and soaring fertilizer prices due to a global energy crisis are expected to increase costs for many farmers in the region. In some countries, this may require governments to intervene to increase subsidies to farmers to ensure essential supplies.
The borders of China
Like many other rice-producing countries, Thailand buys almost all of its urea, phosphate and potassium from abroad, including from China. This makes the country more vulnerable to changes in Chinese export policies, and the woes are exacerbated by rising logistics costs.
China is stepping up inspection of fertilizer exports over concerns over the impact of rising prices on national food security, according to a customs notice dated Oct. 11. China is a key supplier of urea and phosphate to the world market, including to India and Pakistan. and the countries of Southeast Asia.
READ: China’s restrictions on fertilizer exports deepen global price shock
With flooding sparing most of Thailand’s rice fields and exporters still have a 6 million tonne shipment target this year, fertilizer costs will become a ‘big deal’ for farmers already struggling with low prices. , said Pramote. âThe government should step in. Prices for Thai 5% broken white rice, a benchmark quality, fell about 30% from February’s high.
Fertilizer costs have an impact elsewhere in Asia. Vietnam’s crop production department encourages rice farmers to halve fertilizer use. Meanwhile, in the Philippines, Wilfredo Roldan, administrator of the Fertilizer and Pesticide Authority, expects local prices for rice and corn to rise, as fertilizers account for up to 70% of the cost of production.
(Updates to add prices, Vietnam and Philippines from penultimate chart)
Bloomberg Businessweek Most Read
Â© 2021 Bloomberg LP