Wednesday, August 13, 2008

High fertilizer prices impact El Salvador's coffee fincas

The high price of petroleum products has made fertilizer unaffordable for many coffee farmers in El Salvador and the rest of Latin America. This Reuters report describes the problem:

SANTIAGO DE MARIA, El Salvador, Aug 13 (Reuters) - The thinning trees of El Salvador's coffee orchards are the most visible signs of strain on an industry that should be booming.

Coffee prices are near their highest since a global coffee crisis earlier this decade, but growers say fertilizer costs are rising even faster, hurting their ability nurture plants.

In Latin America, home to some 60 percent of global production, farmers say output will suffer.

"With fertilizer prices so high, we haven't been able to fertilize, and we'll feel the effects in the next harvest," said Luis Roque, an agronomist at the UNEX coffee exporting company that grows arabica beans in El Salvador.

Gazing at the coffee trees lining the slopes of a nearby volcano, in the town of Santiago de Maria, Roque points at stunted branches of usually robust trees, where thinning leaves show sub-standard nutrition.

Fertilizer prices, stable for almost a decade, have skyrocketed in the last year on high demand and as oil and natural gas prices rose....

With less nutrients, trees will bare fewer beans than usual next year, likely pushing up prices of the world's second most traded commodity after oil.

Prices for common phosphate fertilizers have increased five-fold in the past 15 months to an unprecedented $1,230 per tonne. At that level, farmers must use close to a third of what they earn per pound of coffee just to pay for fertilizers.

3 comments:

El-Visitador said...

Most nitrogen fertilizers are now manufactured using natural gas.

El Salvador has no chance whatsoever of locally manufacturing these types of fertilizers because there is no LNG re-gasification plant nor sea terminal, so even if someone wanted to set up a local fertilizer plant, they would not be able to do it. No LNG tankers for El Salvador!

Cutuco Energy wanted to build such a terminal and re-gasification plant.

What happened to it? Don't know, it is probable that the surge in LNG prices killed the project before the first stone was laid.

Of course, if MARN hadn't taken over 18 months to even acknowledge receipt of the permit application, the plant might have been built in 2007 before the price rally.

Could it be that MARN is the entity that ends up killing the coffee crop in El Salvador?

Nanelle said...

The matter should be less problematic for creative farmers who find a way to work in a more organic way. Chickens generate great fertilizer, and eat some pests while they are at it. I've known farmers who reduced their production costs and the use of fertilizer dramatically, by changing their farm from a monoculture of trees, to a more broadly populated farm. this reduces the countries dependence on outside products as well... therefore will never fly on a huge scale.

Nanelle said...

The matter should be less problematic for creative farmers who find a way to work in a more organic way. Chickens generate great fertilizer, and eat some pests while they are at it. I've known farmers who reduced their production costs and the use of fertilizer dramatically, by changing their farm from a monoculture of trees, to a more broadly populated farm. this reduces the countries dependence on outside products as well... therefore will never fly on a huge scale.