Shelly-Ann Thompson, Staff Reporter

Effective today, farmers will pay an average 30 per cent increase on the price of fertilisers despite a Government subsidy that was implemented in January.

Newport-Fersan, the island's sole manufacturer of fertiliser, informed its customers last week that the company was grappling with increasing prices and part of current costs has to be passed on to the distributors.

Speaking with The Gleaner yesterday, John Allen, managing director of Newport-Fersan, said raw materials for fertiliser have increased by more than 100 per cent in four months.

Increase all around

"For instance, bi-ammonium phosphate. In October, we (Newport-Fersan) bought the raw material for in the region of US$420 per metric tonne. Today, we pay US$900 for the same product at the same weight," Allen said.

The managing director said, too, that all other raw material prices continue to increase.

Fertiliser prices rise with new demands for food crops - especially corn for ethanol and other biofuels - and higher demand for grain-fed meat in the emerging economies of China, India and Brazil.

"The increase in prices is just reflecting the cost of market forces in raw materials as the world continues to compete for grains to create energy," he said.

While the price of fertiliser has increased by 30 per cent, Allen said the Government's $70 million subsidy on the commodity - rolled out a month ago - is still in effect on the ex-factory price of the ingredient.

Farmers will still be able to benefit from the 10 per cent reduction and will therefore be charged a 20 per cent increase on the price of all grades of the farming ingredient.

Unexpected adjustments

When the subsidy took effect, Allen said the $70 million would be applied to 12,000 tonnes of fertiliser, based on prices at that time. Additionally, based on past buying patterns, this 12,000 tonnes of fertiliser was expected to last until March, he had said.

Now Allen is saying that unexpected increases have occurred, forcing adjustments to be made.

"Based on current buying trends, my expectations are that it (the subsidy) could last beyond the middle of March," he said. "If purchasing slows down, it means it would last for a longer time."

Agriculture Minister Dr Christopher Tufton has scheduled a meeting today with Newport-Fersan and other sector leaders.

shelly-ann.thompson@gleanerjm.com