So far this year the increase in the price of agricultural inputs has already reached 29.4%, and although in the same period January-September 2021 the increase was 34.89%, with which the situation points to normalization, it is not yet reflected in the price of products or the cost of production.
With this panorama, the consequences generated by the war in Ukraine, the volatility of the exchange rate and the delay in the increase in the price of inputs, still keep in check not only the family basket, but also the producers and at the same time the Government which is already alternatives to mitigate the impact.
Data which has been revealed by the Rural Agricultural Planning Unit (UPRA), and which corresponds to the price index of agricultural inputs delivered monthly, shows that in the case of fertilizers and pesticides, the increase over the last 12 months has been 61.27%. The value exceeds that recorded between October 2020 and September 2021, which was 34.97%.
These figures have made food production a challenge for products. The premise is confirmed by Germán Palacio, director of the Colombian Federation of Potato Producers (Fedepapa), who comments that it is very unlikely that any strategy implemented will help sustain the increase in inputs.
The The leader of Fedepapa explained that, for example, he produces one hectare of potatoes today it costs about 34 million dollars while a year ago the price was 22 million dollars. An increase of more than 50%.
“The price increase of fertilizers and other inputs that we use in the paper industry is between 25% and 30%, now it is much more expensive and difficult to produce profitably. Regarding the strategy that President Petro has announced to import fertilizers, I am skeptical, since the Minister of Agriculture of the Santos government has imported fertilizers and that practically has not had much impact because the imports are very small, between 30,000 and 40,000 tons and compared to the country’s consumption between 600,000 and 700,000 tons will not be enough,” Palacio said.
the same landscape
They also explained the problem from the livestock sector, ensuring that the increase in the prices of fertilizers used for livestock exceeded 200% in the last year, while balanced and concentrated fertilizers are also on the rise due to the increase in the price of corn.
“Fertilizers have grown by almost 200% in the last year and a half, in terms of balanced and concentrated corn prices they have also increased a lot and although in the last four months the international price has dropped slightly, the value of these essential products in the dairy sector they continue with increases of 20%”, explained Oscar Cubillos, head of planning and economic studies at Fedegan.
Cubillos stressed that he also had to deal with the increase in electricity with an increase of 23% and with the issue of imported cables for livestock, which were determined by the exchange rate and its volatility.
On the other hand, and according to data from the National Federation of Poultry Breeders (Fenavi), over 80% of the production cost of chicken and eggs corresponds to a balanced diet for birds. In this regard, from August 2021 to October 2022, the increase was 4% for corn and 9% for soybeans.
The affected flowers
Another very similar case is experienced by flower growers whose sector, which between January and April of this year generated 803 million dollars in exports and 117,811 tons, now sees its inputs increase by 60%.
“In the first half of the year and compared to the same period in 2021, the increase in fertilizers and paper was 55%, rice husks 40%, wood 30%, and furrows for tying boxes by 35%. become more expensive. After inflation, the gas problem in Europe and inflation in the United States, it was not easy to pass this increase on to the final consumer and we producers took on the high costs of inputs” , explained Augusto Solano, president of the Colombian Association of Flower Exporters (Asocolflores).
In this way, and analyzing the price trend from January 2020 to September 2022, Felipe Fonseca Fino, director of Upra, explained that it is evident that the biggest increases occurred from August 2021, mainly in November of that year and in April and May 2022. Similarly, an apparent stability is evident with smaller increases in June 2022 and with a decline in July 2022 of 1.46 percentage points.
“Prices of agricultural inputs decreased by 1.46% compared to June 2022, a downward trend mainly due to the decline in fertilizer prices. Although a season is approaching in which input prices have presented significant inflationary figures, everything points to prices starting to be regulated”, Fino assured.
For industry players, agricultural inputs will be an item on the agenda of the new government, which not only has the challenge of mitigating the increase experienced by the sectors, but also to seek solutions that in the long term generate stability for producers colombians.
