FERTILISER importers are expected to drop prices by more than 15 per cent this quarter. This will benefit oil palm plantations as they use up some 3.5 million tonnes or 90 per cent of the country's chemical fertiliser imports.
Plantation Industries and Commodities Minister Datuk Peter Chin said fertiliser prices in the world market, except for potash, have fallen significantly and it is only logical to see these savings passed on to the plantations.
"In the last quarter, they've dropped prices by 15 per cent. They are now calculating the quantum of price drop for this quarter. It's likely to be more," Chin told Business Times after meeting with Agriculture and Agro-based Minister Datuk Mustapa Mohamed and Fertiliser Industry Association of Malaysia (FIAM) in Putrajaya yesterday.
To help reduce the country's fertiliser import bill, the ministry and Bank Negara Malaysia recently approved barter of US$70 million (RM253 million) palm oil for fertiliser with North Korea and Russia.
Last year, oil palm planters paid more than RM6 billion to fertiliser importers for an estimated 3.5 million tonnes at market pricing.
Apart from North Korea and Russia, Chin said, Malaysia wants more barter trade with other fertiliser producing countries like Morocco, Jordan, Syria and Iran.
Since 1992, Malaysia has been bartering palm oil for other commodities via the Palm Oil Credit and Payment Arrangement (POCPA) with Bank Negara as credit guarantor.
FIAM chairman Zainal Matassan said: "Although barter trade is an option that would involve extra steps and procedure, we'll strive to find ways to implement fertiliser purchase via the POCPA. We'll revert to the honourable ministers soon, before the end of this month."
On another note, Malaysian Palm Oil Board had, effective January 1 2009, reduced collection of price stabilisation cess from all oil palm planters to RM2 per tonne.
Asked if the reduction could hamper implementation of the B5 mandate where 5 per cent biodiesel is blended into regular diesel for use in the local market, Chin replied: "No, it will not, because this mandate will be carried out step by step."
Something2Share:
The drop prices of fertilisers is indeed a good news to the plantation companies and the planters.
We look forward for further drop and also reduced price of MOP (Muriate of Potash) in near future.
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3 comments:
Dear Mr. Loh KP,
My comments are as follows :-
1.Fertilizers are commodities traded worldwide, just like CPO or Crude oil,the prices is determined by supply and demand, it is not controlled or priced by anybody, but the market forces.
2.The selling prices of fertilizers is very much depend on the CFR prices (or at least indicated CFR prices from suppliers) and other reasons. That is the reasons for the drop in both the prices of N, P & Mg recently.
3.Prices of fertilizers also depends on other logistics reasons.
4.Drop in fertilizers prices is good for plantations, and is also good for fertilizer companies. ( because they need less capital to go into business).
5.Till today no one knows the scenario or trend of MOP price.
Dear Max,
MOP used to be RM 890/mt in 2007 and early 2008. This shot up to RM3500/- towards middle of '08. Now it is around RM2800/-.
We all know that the price is dictated by the cartel. To control pricing, all stakeholders must play a part including the govt.
I won't go into this as there are many areas we can look at it. Business today is quite unlike the yore. It is like a rush to make plenty of hay while the sun still shines!
Composting is an area worth looking deeper into. Of course it entails a lot of work, initial capital costs etc. This should be viewed on a long term basis.
Again, you know of the benefits. Most people wants to take the easy way out, people do not like the hassles.
Everyone knows that fossil fuels will deplete in time to come. PORIM had a few vehicles running on Palm Oil in the early 80s. 28 yrs later, what progress have been made? Again when the crisis hit us then we start to walk! This is akin to 'Necessity is the mother of invention'.
We keep our own house in order and do what's right. We cannot comment. Most if not all 'bosses' do not like smart Alexes
You are right, my friend. Do what's right and keep our house in order. The show has to go on.
Thanks for sharing.
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