Egypt to begin second phase of universal health insurance in Minya    Madrid trade talks focus on TikTok as US and China seek agreement    Egypt hosts 4th African Trade Ministers' Retreat to accelerate AfCFTA implementation    Egypt's Investment Minister, World Bank discuss strengthening partnership    El Hamra Port emerges as regional energy hub attracting foreign investment: Petroleum Minister    Power of Proximity: How Egyptian University Students Fall in Love with Their Schools Via Social Media Influencers    Egypt wins Aga Khan Award for Architecture for Esna revival project    Egypt's Sisi, Qatar's Emir condemn Israeli strikes, call for Gaza ceasefire    Egypt's gold prices hold steady on Sep. 15th    EHA launches national telemedicine platform with support from Egyptian doctors abroad    Egypt's Foreign Minister, Pakistani counterpart meet in Doha    Egypt condemns terrorist attack in northwest Pakistan    Emergency summit in Doha as Gaza toll rises, Israel targets Qatar    Egypt advances plans to upgrade historic Cairo with Azbakeya, Ataba projects    Egyptian pound ends week lower against US dollar – CBE    Egypt hosts G20 meeting for 1st time outside member states    Lebanese Prime Minister visits Egypt's Grand Egyptian Museum    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Egypt seeks Indian expertise to boost pharmaceutical industry    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Fertiliser price hikes
Published in Al-Ahram Weekly on 02 - 08 - 2018

The rise of fuel prices in June has added to the burdens shouldered by farmers as it has led to a further hike in the prices of fertilisers.
Ahmed Mohareb, a farmer in the Beheira governorate, said that a 50 kilogram bag of urea, a kind of nitrogen fertiliser, had now reached LE285 compared to LE230 earlier. Urea is the most common nitrogen fertiliser used in Egypt and around the globe.
According to Mohareb, his costs have recently increased due to hikes in fertiliser prices as well as land-rental costs which have surged from LE6,000 to an average of LE12,000 to LE15,000 per feddan in his village in the Beheira governorate.
While producers and traders have attributed the increase to hikes in fuel prices including of the natural gas used in the production of fertilisers, experts believe that the problem is also related to the marketing and distribution of fertilisers.
Adel Fadel, deputy chairman of the Egyptian Fertiliser Traders and Distributors Association, told Al-Ahram Weekly that a black market can develop when a subsidy system is in operation, and that one of the present problems is that benefits can go to traders instead of farmers.
Under Egypt's fertiliser subsidy system the state-owned Principal Bank for Development and Agricultural Credit (PBDAC) and agricultural cooperatives provide subsidised fertilisers to farmers.
There are eight public-sector companies making fertilisers, among them Abu Kir, Delta, and Helwan Al-Masriya, in addition to five private-sector companies that provide 55 per cent of their production to the government to sell to farmers at subsidised prices through the PBDAC and agricultural cooperatives.
The rest of the companies' production is sold on the free market or exported.
“The market price has reached LE5,200 per ton while subsidised fertilisers are sold at LE3,200 per ton. The difference between the two prices encourages speculators who do not cultivate the land themselves,” Fadel said.
Instead of selling fertilisers at subsidised prices, they may divert them to the black market in search of profits. Fertilisers may also be sold to local farmers at prices close to the international price.
Fadel warned that any increases in the costs of agricultural production would inevitably lead to retail price rises, causing consumers to pay more for rice, sugar, wheat and other food products.
Another factor contributing to price increases has been the small quantity of subsidised fertilisers the government gives to farmers. A feddan of tomatoes may need eight bags of fertiliser, while the government may only provide three, for example.
Demand for fertilisers is usually highest in the summer season because summer crops need more fertilisers than those grown in winter. According to ministry of agriculture figures, 2.5 million tons of fertilisers representing 40 per cent of summer's total needs have already been delivered to farmers.
Moreover, the increase in the amount of land farmed illegally and therefore not eligible for subsidised fertilisers has increased, leading to higher demand for fertilisers on the free market and higher prices.
Fertiliser prices have also been affected by illegal exports despite contracts signed by the government and fertiliser producers giving the local market priority.
Nasr Al-Qazaz, a professor of agriculture at Al-Azhar University in Cairo, said that high international prices encouraged companies to export more than the government permits in order to make more profit.
This can lead to a shortage of fertilisers on the local market and hence an increase in prices. The price of exported fertilisers is over LE5,000 per ton while the subsidised price is LE3,200 per ton. The government imposes a fine of LE50 per ton exported without permission, but this is too low to deter the companies.
Al-Qazaz said the fertiliser market required further supervision in order to maintain a sufficient level of production. Greater transparency on subsidies, production, exports and local market needs was also necessary, Fadel said.
In October 2017, the cabinet decided to increase the subsidised price of urea fertilisers from LE3,000 to LE3,200 per ton in response to requests from fertiliser companies after last year's increase in fuel prices.
Egypt's total annual production of fertilisers is estimated at 15 million tons.


Clic here to read the story from its source.