JOHN Allen, general manager of Kingston-based company Newport Fersan – the island’s sole fertiliser manufacturer – on Monday said the quest by the agriculture ministry to find cheaper input overseas might not be as easy as it sounds.

“In the first instance I have my doubts whether it’s going to be possible for them to find cheaper sources but we have to keep an eye on whoever it is that intends to import fertilisers into the island because that would impact on our capacity to produce and produce economically,” Allen told the Observer.

Agriculture and Lands Minister Roger Clarke earlier this month said efforts would be made to find “the cheapest fertiliser anywhere in the world” in response to the continued rise in the cost of the input which has been a point of distress for farmers.

On Monday he said his ministry and the Industry, Technology, Energy and Commerce Ministry have been in contact with a Venezuelan entity to source fertiliser for the home market.

“Right now we are looking at trying to get something out of Venezuela. we are working on it,” Clarke told the Observer, adding that despite fears that the input could not be sourced at lower rates an effort would still be made.

“We are still trying anyhow and we believe we might be able to find it based on the relationship we have with Venezuela at this time,” Clarke said, adding that it was “hoped it would cost less”.

But Fersan’s Allen said that importing may not be the best move.

“The smaller volumes that we are going to be producing will result in higher pricing. The real point is we are going to have a very real task achieving that because the situation is not unique to Jamaica; the increase in the prices of raw material is an international problem,” he argued.

On Monday, local distributor Hi-Pro said the price of fertiliser ranged between $1,500 to approximately $4,000 per bag depending on bag weight and type.

But in defence of Fersan, Allen was quick to point out that the price increases were justified.

“We have had to increase prices because of the continual increases in the raw material prices. The government along with others are concerned about the continuous increase in prices and we just want the public to know that it’s not as a consequence of the fact that we are the only manufacturers on the island now that we are abusing this particular position but that all the increases are justified,” he told the Observer.

“A number of persons are speaking as if the product moved from one price to end up at another price therefore giving the impression that one jump gets you to that figure. We have had four adjustments in prices last year; also we are trying to catch up with the movement in the price of raw material,” Allen added.

Furthermore, he said some raw material prices have moved up by over 26, 50 and 100 per cent over a one-year period.

“For example, Diammonium phosphate, in October of 2006 that product was US$256 in Tampa, Florida but in April of this year that same product was US$432 per ton in Tampa. That increase alone was in the order of close to 70 per cent,” he pointed out.

Allen said other inputs such as sulphate of ammonia and potash have also increased by some 27 per cent.

“The point I am making is that wherever you go, you are going to be seeing that raw material prices have soared,” he added.

Allen said that with much of the grains used for human and livestock, food are now being used to produce ethanol or other bio fuel. As a result, producing countries have been increasing their acreages thereby requiring more fertiliser – a demand which the producers of the raw material have not been able to meet.

“The problem there is that the producers of the fertiliser raw material have not caught up with the demand that is out there and that is driving the prices,” he explained.

He added that it was in the best interest of the farming community to utilise the products efficiently as price cuts were highly unlikely any time soon.

“The prices are not going to be falling anytime soon because the particular trend with respect to the increase in raw material will be over two to three years based on the projections. Based on the trends in the fertiliser market this is going to continue into 2010 and maybe beyond and so the best way out is to improve efficiencies, use whatever technologies that are available,” Allen advised.