JAKARTA - Prices of urea and NPK fertilizers have skyrocketed by 100 percent in the last six months. The reason is the surge in raw material prices in the global market due to protection from the producing countries, as well as rising commodity prices.
The price of urea fertilizer is now in the range of IDR 560,000 per 50 kg bag. Last year, the price of urea fertilizer was around Rp. 250,000 per bag.
Meanwhile, the price of NPK fertilizer skyrocketed to IDR 620,000 per bag. Last year, the price of this type of fertilizer was still in the range of Rp. 280,000 per sack.
PT Pupuk Indonesia's Senior Vice President of Corporate Communications, Wijaya Laksana said, the main factor for the soaring price of fertilizers was the energy crisis in Europe. This condition results in higher gas prices, so that the cost of fertilizer production increases.
The Chinese government's policy of stopping the supply of phosphate to the global market also raised fertilizer prices. Wijaya added that the shipping crisis has also raised the cost of shipping fertilizers.
To reduce fertilizer price pressure for consumers, Pupuk Indonesia, said Wijaya, has actually implemented non-subsidized fertilizer prices for retail users (farmers) below the market price. This effort was made to ease the burden on the farmers.
"We are trying to meet the need for non-subsidized fertilizer so that it does not burden farmers, one of which is through the Prosperous Program, so that they are able to buy non-subsidized fertilizers," said Wijaya in a written statement, quoted Monday, February 7th.
Based on the records of the Indonesian Fertilizer Producers Association (APPI), Pupuk Indonesia Group controls 20 percent of the non-subsidized fertilizer market share in the domestic market. Meanwhile, the company's main customers come from the plantation, industrial, and retail markets (farmers).
Wijaya said that the realization of Pupuk Indonesia's production in 2021 was around 12.3 million tons. Of that amount, 75-80 percent of fertilizer production is channeled to meet domestic needs for subsidized fertilizer products.
"According to the assignment from the government, Pupuk Indonesia has prepared 9.1 million tons of subsidized fertilizer for domestic needs. It means that around 75-80 percent of fertilizer production is prioritized to meet subsidized needs," he said.
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