The HET for subsidized fertilizer in 2024 is set to be the same as the HET in 2023. Meanwhile, world fertilizer prices in 2024-2025 are expected to fall.
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By
HENDRIYO WIDI
·4 minutes read
KOMPAS/ABDULLAH FIKRI ASHRI
Officials inspect subsidized fertilizers at the Warehouse for Line III Fertilizers in Kedawung, Cirebon, West Java, on Thursday (13/7/2023). PT Pupuk Indonesia (Persero) has prepared a stock of subsidized fertilizers in Cirebon Regency consisting of 13,240 tons of urea and 1,947 tons of NPK. The fertilizers can last up to two weeks.
JAKARTA, KOMPAS — The Ministry of Agriculture has set the highest retail price or Subsidized fertilizer HET not increase or be the same as last year's HET. This policy will benefit farmers amidst the increase in government purchasing prices for dry harvested grain.
The subsidized price for urea fertilizer is set at IDR 2,250 per kilogram (kg) and subsidized NPK fertilizer is set at IDR 2,300 per kg. The subsidized price for specialty NPK formula and organic fertilizer are each set at IDR 3,300 per kg and IDR 800 per kg.
The price limit is regulated in the Agricultural Minister's Decree Number 249/KPTS/SR.320/M/04/2024, signed by Agriculture Minister Andi Amran Sulaiman on April 22, 2024. The price limit for subsidized fertilizer is effective starting from the date of its establishment, which is on April 22, 2024.
The regulation also mentions that subsidized fertilizer is intended for farmers in the subsector of food crops, including rice, corn, and soybeans, as well as horticulture such as chili peppers, shallots, and garlic.
Subsidized fertilizer can also be used by small plantation farmers, such as those growing sugarcane, cocoa, and coffee, with a land area of 2 hectares. Similar conditions also apply to farmers who are members of the Forest Village Community Institution (LMDH).
"The allocation of subsidized organic fertilizers is prioritized in the center of rice commodity areas on paddy fields with organic-C content less than 2 percent," said Amran explaining the regulation, on Tuesday (30/4/2024).
The subsidized fertilizer price ceiling was set unchanged from last year after the government increased the subsidized fertilizer budget in 2024 from IDR 26 trillion to IDR 53.3 trillion. With the increased budget, the subsidized fertilizer quota also increased from 4.7 million tons to 9.5 million tons.
The unchanged price of subsidized fertilizers will also benefit farmers after the government raised the government purchase price (HPP) of harvested dry grain (GKP) at the farmer level. HPP has increased from Rp 5,000 per kg to Rp 6,000 per kg.
The government is asked to ensure the ease of access for farmers to obtain the subsidized fertilizers. It is important that the fertilizers do not become scarce or leak to those who are not entitled to use them.
The management of the Indonesian Seed Bank and Agriculture Technology Association (AB2TI) in West Java, Masroni, appreciates the government's decision not to increase the subsidy fertilizer's fixed ceiling prices. This policy will reduce the production costs of unhusked rice and benefit farmers after the unhusked rice's reference prices have increased.
However, he asked the government to ensure ease of access for farmers to obtain the subsidized fertilizer. "Do not let the fertilizer become scarce or leak to those who are not entitled to use it," said Masroni.
Residents are carrying non-subsidized fertilizer during the Fertilizer Discount Festival at the Pupuk Indonesia (Persero) Warehouse Line III in Kedawung, Cirebon, West Java on Monday (5/2/2024). PT Pupuk Indonesia (Persero) is providing approximately 5,000 discount coupons with 40 percent off for farmers who wish to buy non-subsidized fertilizer. The program is expected to help farmers who are having difficulty obtaining subsidized fertilizer according to their needs.
World fertilizer prices
Meanwhile, in the Commodity Markets Outlook April 2024 Edition which was released on April 25 2024, The World Bank estimates that fertilizer prices will begin to fall in 2024 and 2025. However, if geopolitical conflicts in the Middle East and Russia-Ukraine is tapering off again and there are maritime logistics obstacles, fertilizer prices could rise again, although not as high as in 2022 and 2023.
The price of diammonium phosphate (DAP) fertilizer, for example, is estimated to be 600 US dollars per ton in 2024 and 550 US dollars per ton in 2025. These prices are still lower than the price of DAP fertilizer in 2022, which reached 772 US dollars per ton.
As for the price of urea fertilizer, it is projected to be 350 US dollars per ton in 2024 and 325 US dollars per ton in 2025. This price has dropped significantly from the price of urea fertilizer in 2022, which reached 700 US dollars.
The World Bank also shows that the world fertilizer price index in 2024 and 2025 will decline to 120.2 and 112.9 respectively. This index is far below the world fertilizer price index in 2022 which will reach 235.7.
”Fertilizer input costs are expected to fall by 21.7 percent in 2024 and 6.1 percent in 2025 on an annual basis. However, if the geopolitical conflict escalates and maritime logistics problems arise in the Black Sea and Middle East, fertilizer input costs will rise. "The increase in fertilizer input costs will have an impact on increasing food prices," the World Bank said in the report.
SUMBER: BANK DUNIA
The development and projection of the world commodity price index in the Commodity Markets Outlook Edition 2024, released by the World Bank on April 25, 2025.
The volatility of global fertilizer prices affects the prices of fertilizers in Indonesia. This is because Indonesia is a country that imports fertilizer raw materials and fertilizers.
The Central Statistics Agency noted that throughout 2023, Indonesia imported 5.37 million tons of fertilizer and fertilizer raw materials worth 2.03 billion US dollars. The volume and value of the fertilizer decreased by 16.29 percent and 44.9 percent respectively compared to 2022.
In 2023, China will be the largest supplier of imported fertilizer to Indonesia, at 1.15 million tons. The next biggest suppliers in sequence are Russia with 1.08 million tons, Canada with 625,200 tons, Egypt with 486,600 tons, and Jordan with 368,800 tons.
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