Fertilizer, freight costs seen as main areas of concern due to Iran crisis

THE Department of Agriculture (DA) said the impact of the Iran crisis is expected to manifest in the cost of synthetic fertilizer, much of which is petroleum-based fuel, which farmers and fisherfolk depend on, and the cost of freight, which will rise due to the risk premiums attached to shipments from the Persian Gulf.

In a statement on Tuesday, the DA said: “We are concerned about the intensifying conflict between the US and Iran as it might increase oil prices over an extended period, affecting petroleum-based fertilizers, freight costs, and the fuel that powers the machinery our farmers use and the boats our fishermen rely on,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. was quoted as saying.

The DA said increased fuel prices can drive up the cost of agricultural inputs, particularly nitrogen-based fertilizer products derived from natural gas.

The DA added that higher bunker fuel costs can raise shipping rates, increasing the landed cost of imported commodities such as wheat and animal feed, with knock-on effects on the prices of bread, poultry, and pork.

“We have seen this during past oil shocks, and we are now looking at ways to manage the impact on our food systems and on the country’s food security,” Mr. Laurel said.

Mr. Laurel earlier told BusinessWorld that the DA is currently assessing possible interventions for farmers and fisherfolk who may be affected by the Iran crisis.

“We are studying now what we can assist them with. I hope this conflict in the Middle East does not last long,” he said. — Vonn Andrei E. Villamiel