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ECONOMY > Agriculture

Record-high fertilizer prices seen battering Japan farmers

  • June 3, 2022
  • , Jiji Press , 10:30 a.m.
  • English Press

Tokyo, June 3 (Jiji Press)–Soaring prices of fertilizers are certain to deliver a heavy blow to farmers in Japan.

 

The National Federation of Agricultural Cooperative Associations, or Zen-Noh, has decided to substantially raise its fertilizer prices from June, with major products seeing their prices reach record heights.

 

The move reflects a surge in international market prices, brought on by decreases in shipments from Russia and Ukraine, both major exporters of nitrogen and other fertilizer ingredients, following Russia’s invasion of the neighboring country.

 

As fertilizer prices are expected to remain high for the time being, Japan’s government and ruling coalition have launched discussions on creating a new subsidy scheme.

 

On Tuesday, Zen-Noh announced a decision to raise the prices of imported urea by 94 pct for June-October from the preceding seven months. Prices of potassium chloride and compound fertilizers are going up by 80 pct and 55 pct, respectively.

 

 

The Hokuren Federation of Agricultural Cooperatives, a producers’ group in Hokkaido, northernmost Japan, announced on Wednesday that it will raise fertilizer prices by an average of 78.5 pct for the period to May 2023.

 

The pace of rises in fertilizer ingredient prices started to accelerate in autumn last year, when China, another major producer, imposed export restrictions as it prioritized domestic supplies. Prices were also pushed up by a spike in fuel prices, higher transportation costs and a plunge of the yen on the foreign exchange market.

 

For ammonium phosphate, Zen-Noh has changed the source of procurement from China, which had accounted for most of the group’s imports of the item, to Morocco. The group, which had bought up to about 20 pct of potassium it handles from Russia, has started to increase imports from Canada.

 

Despite the efforts by Zen-Noh, the fertilizer shortage in Japan continues to be serious. Some Japanese trading companies have been seen losing to foreign rivals in competition for fertilizer procurement, an industry source said.

 

Under its recently compiled emergency package of measures designed to tackle surging prices of goods and services, the Japanese government is set to hand out subsidies to help businesses cover extra transport costs stemming from changes in suppliers.

 

The government has also been encouraging overseas fertilizer producers to boost their supplies. As part of the campaign, a senior official of the Japanese agriculture ministry has recently visited Morocco.

 

However, farmers continue to face challenges.

 

With prices of agricultural products determined based on the supply-demand balance, it is difficult for farmers to pass higher production costs onto sales prices.

 

“If (heavy) financial burdens remain in place for a long period of time, that could lead to farmers quitting their businesses,” said a lawmaker of the ruling Liberal Democratic Party who has links with the agriculture sector.

 

The government and the ruling camp are aiming to introduce an aid program to ease farmers’ burdens from rising fertilizer prices, informed sources said. The government currently has a similar scheme for compound feed that offers aid when prices surge.

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