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Fertilizer price hikes to curb PHL rice yields, consumption — ADB

PHILIPPINE rice yields are expected to decline this year and in 2025 because of the rise in fertilizer prices following Russia’s invasion of Ukraine, the Asian Development Bank (ADB) said.

“Doubling fertilizer prices in the Philippines would lead to a 0.24% to 0.28% decline in rice yields from 2022 to 2025,” the ADB said in its report, “The Russian Invasion of Ukraine, Fertilizer Prices, and Food Security.”

Russia is the world’s largest exporter of oil and nitrogen, and is the second largest exporter of potash and phosphorus fertilizer. It has suspended fertilizer exports since invading Ukraine in 2022, putting pressure on agricultural production.

“This invasion has increased the price of fertilizer and the uncertainty in fertilizer supply for many smallholder rice farmers worldwide, especially poor smallholders in South Asia and Southeast Asia. Thus, farm families in low- and middle-income countries are vulnerable to unsustainable rice production and lack of food security,” according to the report.

The report details the impact of three scenarios of fertilizer price increase — 30%, 50% and 100% — on a country’s rice yield, retail prices, consumption, production, farmgate price, and net trade.

According to the report, a 30% rise in fertilizer prices will reduce the Philippines’ rice yields this year by 0.10%, while a 50% increase will lower yields by 0.14%. A 100% increase will result in a 0.24% decrease in yield.

Retail prices of rice could rise 8.66% this year and 8.45% next year.

“For consumers in Thailand and the Philippines, retail rice prices could increase more than for consumers in the People’s Republic of China, India, and Vietnam,” the ADB said.

Higher fertilizer prices could cause Philippine rice consumption to drop in 2024 and 2025, the bank said.

The three fertilizer price rise scenarios will curb Philippine rice consumption by 0.53%, 0.80%, and 1.30% respectively this year.

The bank called on governments and relevant organizations to support domestic rice production, push for crop diversification, and reduce import dependence to temper the effect of higher fertilizer prices.

“The results underscore the importance of continuing to invest in and implement policies aimed at making rice production more price-sensitive, such as the continued use of technology for higher productivity and strengthening farmer organizations,” the ADB said. — Beatriz Marie D. Cruz