6 months ago
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In the face of a 13 per cent reduction in the price of granular fertiliser by market leader Newport-Fersan, the producer and commercial supplier of the agricultural input is urging farmers and other users to be vigilant as price reductions are not always passed on to the end users.
This is the observation from sales manager at Newport-Fersan, Denton Alvaranga, following the company’s announcement of its latest round of price decreases in the vital farming input.
Newport-Fersan Jamaica Limited has consistently cut fertiliser prices for at least three years.
“It is a direct response to the trajectory of prices of raw materials on the world market. Our costs start going down and we’ve decided to pass on the benefit to the end users,” Alvaranga told the Financial Gleaner.
Noting that as market leader Newport-Fersan makes a diverse number of fertiliser blends, Alvaranga said prices of inputs used to manufacture the product fluctuate from time to time but that there has been a sustained general downward trajectory.
As such, on April 2, the company announced a 13 per cent price cut to coincide with Farmers’ Month celebrations.
Prior to last week, the company reduced the price of fertiliser by about 22 per cent in October 2023 and before that there was a reduction of 18 per cent. However, Alvaranga noted that the company has found that retailers have not been passing on the price reductions to their customers but have been keeping them to themselves.
“In the past we did not announce these price decreases and we found that as a consequence farmers did not benefit from the price reduction. That is why we have announced it this time around,” he said.
Newport-Fersan is Jamaica’s sole manufacturer and leading provider of fertilisers with a market share of 85 per cent in the granular category, according to Alvaranga. The little competition there is comes from companies such as H&L Agro, which imports the Sapphire brand of fertilisers.
Fertilisers are typically produced from raw materials such as nitrogen and potash, the prices of which are subject to global market demand and supply factors, including geopolitics, such as the Russia-Ukraine war, and natural disasters. Nitrogen is commonly derived from urea, a petroleum distillation by-product. The potash is mined from inside the earth in countries such as Chile and the United States.
Since peaking at US$411.40 in October 2023, the price of urea has been trending downwards, and as at March 2024 it was US$330 per metric tonne.
“What we do is to observe over a period of time and, using our own metric and historical data, we decide on the trend. And we take a decision to pass on those benefits to the consumers,” Alvaranga said.
He said while the fertiliser price reductions are being announced in Farmers’ Month, which is celebrated annually in April, they will be held for a sustained period or reduced even further as long as world prices keep trending down.
The prices at which Newport-Fersan supplies fertiliser to the market were not disclosed. Alvaranga says that as a matte of company policy product prices are not publicised since there are many blends of fertiliser for different applications. In addition, Newport only has control of the ex-factory prices and farm stores, and other retailers add their mark-ups to cover profit and transportation, he said.
“For example, NPK (nitrogen-phosphorous-potassium) blends such as 17-0-17, a very popular blend in sugarcane and yam production, saw a price decrease closer to 13 per cent, while other blends such as 11-22-22 and 14-28-14, which are popular across the sector saw reductions of under 10 per cent,” he said.
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