fertiliser price cut to boost farmers

Despite falling market prices, farmers, particularly rice growers, would find relief on two fronts - state-guaranteed high prices and lower planting costs.

Chemical fertiliser producers yesterday agreed with the Commerce Ministry to lower their retail prices by 5-20 per cent, although not all immediately. The move would help cut production costs for farmers after the cost of making fertiliser gradually declined along with the oil price.

Fertiliser prices had increased sharply by more than 30 per cent in the first half of this year due to the skyrocketing oil price.

The Cabinet yesterday also agreed to pay Bt12,000 per tonne for 8 million-10 million tonnes of white paddy rice during the upcoming pledging window.

Yanyong Phuangrach, director-general of the Internal Trade Department, said the ministry ordered fertiliser producers to lower their retail prices now to be fair to farmers facing staggering costs. The ministry held a meeting with the country's five largest fertiliser producers - Thai Central Chemical, Chia Tai, Rojanakasikit Fertiliser, Mosaic International, ICP Fertiliser and the Thai Fertiliser and Agricultural Marketing Association.

Rubber and oil-palm farmers would be the first group to enjoy lower production costs because their crops are facing dramatic plunges in prices. Fertiliser prices would be brought down next month by 5-10 per cent, depending on the formula.

Fertiliser prices for the second rice crop would tumble by 10 per cent beginning in December.

Finally, fertiliser prices for the next main crops of rice, sugarcane, corn and beans would be reduced by 20 per cent next April.

According to the ministry, Thailand uses 4.37 million tonnes of fertiliser each year for a plantation area covering 106.3 million rai. Rice requires the most fertiliser, taking 2.01 million tonnes, followed by rubber at 1.04 million tonnes and oil palm at 390,000 tonnes.