Fertilizer prices hiked by 50%
Fertilizer prices to rise by 50%: Fertilizer producers have been given the green light to raise the subsidized prices at which they sell urea fertilizers to farmers to EGP 4.5k per ton under a recent Agriculture Ministry decision. Unnamed government officials told Reuters this amounted to an increase of EGP 1.5k per ton, a 50% hike.
The decision also requires producers to sell at least 65% of their output domestically, with only 10% of this amount allowed to be sold at market prices, and 55% to be put up for sale at the subsidized price.
The increase comes shortly after the government raised natural gas prices for industry, hiking rates by up to 28% for businesses including fertilizers, iron and steel, petrochemical, and cement makers. Natgas is a main fuel source for some fertilizer and metals producers, some of whom expect production costs to rise by 5-10%.
Higher fertilizer prices means higher food prices: Fertilizers have been a key driver of the global surge in food prices this year. Spiking oil and natural gas prices have put pressure on fertilizer producers, which have passed on the costs to the agricultural sector resulting in food price inflation. Food has been one of the key components underpinning the recent rise in headline inflation, a trend that will likely accelerate should fertilizer prices rise further.