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Fertilizer importers allay fears over shortage ahead of planting season

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Nairobi – Fertilizer Importers have today reassured Kenyan farmers that there’s enough stock to meet demand for this year’s planting season. The Fertiliser Association of Kenya (FAK), which brings together 10 importers and fertilizer traders, said today its members are currently holding more than 100,000 metric tonnes (MT) of fertilizer in their stores.

Of this amount, 84,000 MT is the DAP planting fertilizer, which is huge demand as the planting season sets in with resumption of rains. The remaining is made up of NPK 23-23-0, NPK 20-20-0, Single Super Phosphate (SSP) and other planting types of fertilizers. In a statement released in Nairobi today, FAK officials disputed reports of a fertilizer shortage in the country, saying the current stocks were more than enough for planting food crops in the country.

They said the alleged shortage of 30,000 metric tonnes affects only the government subsidized fertilizer, which accounts for only 5 per cent of the total national requirement of 500,000 tonnes.

“Our members have 84,000 metric tonnes in their godowns as we speak and there’s another 30,000MT at the port. The country will have a total of 141,500 metric tonnes by end of March 2012 in time for the long rains’ planting season,” said FAK chairman Eustace Muriuki, who is also the managing director of Mea Ltd. “This clearly shows that there’s no shortage at all if you consider that the NCPB fertilizer is only a small fraction of the total supply. Those protesting about the shortage are beneficiaries of the fertilizer subsidy programme and they are rightly aggrieved that it is being delayed.”

The statement was also signed by the FAK secretary Satish Kumar Bhatia, who is also the managing director of Supplies and Services Ltd and Neelish Shah, the treasurer and managing director of Shah Kanji Lalji & Sons. Under the subsidy programme, introduced in 2008 by the then minister for Agriculture William Ruto, maize farmers buy fertilizer subsidized by Ksh1,000 from the National Cereals and Produce Board (NCPB) to encourage them to use fertilizer in an effort to raise yields and cut the cost of inputs.

“The subsidy programme was meant to help small-scale farmers but it is now an open secret that it is benefiting even the large-scale commercial farmers you saw protesting,” Mr Muriuki said. The subsidized fertilizer retails at Sh2500 per 50kg bag while importers are selling it at market rates. Mr Muriuki said importers are selling fertilizer at Sh3,000-3,500 per bag and dispelled reports that the prices had shot up.

FAK said that global market dynamics had changed from three years ago when a bag of fertilizer reached a high of Ksh6,000, forcing the government to come in with a subsidy programme to cushion farmers from the high cost. He said that local fertilizer prices are determined by the world market prices. In 2008, DAP prices hit $1,250 per metric tonne FOB and the price has since dropped to $550 per metric tonne.

Currently, there is a disagreement over subsidized fertilizer imports after Mea Ltd, one of the bidders, raised a redflag on the tendering process by NCPB and took the matter to the Public Procurement Oversight Authority. Mea Ltd claims that the tender awarded in January this year to Export Trading Company was unprocedural. PPOA is expected to rule on the matter on Tuesday March 6, 2012. Mr Muriuki said regardless of how the ruling will go, there would still be enough fertilizer to go round. “In the meantime, we appeal to farmers to get their fertilizer requirements from their preferred suppliers and be patient as the tendering matter is sorted out.”

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LUKE MULUNDA
LUKE MULUNDAhttp://Businesstoday.co.ke
Managing Editor, BUSINESS TODAY. Email: [email protected]. ke
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