Chemical Fertilizer Prices Soaring, May Lift Grain Prices

Economy

Tokyo, Jan. 1 (Jiji Press)--Chemical fertilizer prices have been soaring both in Japan and abroad, hitting their highest levels in 10 years in the Asian country and raising concerns that grain prices might be pushed up further.

The higher chemical fertilizer prices reflect surging prices of natural gas feedstock in Europe. Natural gas is used to make ammonia, a key component in manufacturing fertilizers.

A combination of factors, including China’s suspension of exports of chemical fertilizer ingredients and a pandemic-induced rise in ocean freight fees, is likely to keep chemical fertilizer prices at high levels for the time being.

Japan’s National Federation of Agricultural Cooperative Associations, or Zen-Noh, has raised the selling prices of straight fertilizers such as nitric acid and phosphoric acid for a period between last November and May 2022 by 4 to 17 pct from the previous period from June 2021 to October in the same year. These prices reached their highest levels over the past 10 years.

As Japan depends on imports for almost all chemical fertilizers used in the country, the rise in their import prices, which is also due to the yen’s recent depreciation against the dollar, is narrowing the profit margins of domestic farmers.

[Copyright The Jiji Press, Ltd.]

Jiji Press