Fertiliser prices ease as farmers brace for planting season

Business Reporter 

WITH summer planting season approaching, fertiliser prices are easing from the record highs reached since the global food crisis in 2008, but are still higher than last year’s levels.

Fertiliser prices have been soaring since February this year after Russia launched military operations in Ukraine with local prices at some point hitting nearly US$80 for a 50 kilogramme bag of ammonium nitrate. (AN). However, the impact of soaring global prices was less felt as the country had adequate stocks for winter cropping.

With Russia’s status as a primary exporter of ammonia, knock-on effects from sanctions imposed on the country by western countries over its military operations in Ukraine have disrupted the supply chain, triggering concerns over food security.

Last year, Russia and Belarus accounted for 40 percent of global exports of potash. Russia also accounted for 22 percent of global exports of ammonia gas, 14 percent of global urea exports, and 14 percent of mono ammonium phosphate.

Harare outlets surveyed by this publication showed prices ranging between US$44 and $68 per 50 kg bag of ammonium nitrate and between US$53 and US$70 for urea.

Compounds are ranging between U$53 and US$68. In Zimbabwe dollar prices, a 50 kg bag of AN is ranging from $31 500 and $42 000 while the price of urea is between $39 000 and $44 000.

This publication observed that in some retail outlets, it is cheaper to buy using the local currency as the US dollar price would be pegged to align with the interbank rate.

At the Zimbabwe Fertiliser Company retail outlet in the Workington industrial area, a 50 bag of AN fertiliser was pegged at about $35 000, or US$64. Similarly, the same bag of fertiliser was priced at US$68 or $37 500 at Farm and City. If one is to change the US dollars using the widely used black market rate of $850 per US$1, one would need US$45. 

Last year, the average price of AN was US$40 while Compound D was US$32.

A sales officer at ZFC said some retailers were taking advantage of the “low” Zimdollar price.

“In US dollar terms using a rate of $850, they are buying $34 000 (US$40 for a 50kg AN bag) and selling at US$50. “If they sell in Zmdollars, their prices will be much higher than ours,” said the officer.

Farmers had expressed concerns over profiteering tendencies by local fertilizer suppliers wanting to take advantage of the Eastern European crisis to overcharge.

The Zimbabwe Farmers Union executive director Paul Zakariya said while the farmers acknowledged the geopolitics that has seen prices of fertilizer going up, “the situation in Zimbabwe is different.” 

“While a bag of fertilizer is going for between US$70 and US$80 in Zimbabwe, you can get the same bag at US$55 in Zambia,” said Mr Zakariya. It’s is typical profiteering.

“It is like the ongoing conflict between Russia and Ukraine is only affecting Zimbabwe.”

Marjorie Rekayi, a Headlands farmer, told this publication at one of the outlets that “I am much relieved given prices that I have been hearing. Yes, they are higher than last year but not to the levels being speculated…I have managed to buy five more bags of Compound D on my budget and I will definitely raise my hectarage.

Tendayi Masimba, a farmer from Karoi urged farmers to scout for the best prices to avoid being cheated. “In the countryside, we are being told that prices of fertilizer have gone up. 

Some local businesses are selling a 50 kg bag of AN at around US$80 when they factor in transport costs but it is still too much. 

I urge farmers to do a proper price survey to avoid being fleeced by these people,” he said.

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