KINGSTON, Jamaica – A war is looming in the inorganic fertiliser industry as the Government moves ahead with its plans to import fertiliser while it accuses the island’s sole manufacturer of the commodity, Newport Fersan Jamaica Limited, of price overcharging.
Agriculture Minister Dr Christopher Tufton said during a press conference, at the ministry’s Old Hope Road, St Andrew, offices yesterday,w that the Government has not received a reasonable explana-tion from the manufacturer, regarding the large and frequent increases of the commodity.
“At every point in our analysis of the fertiliser situation, the ministry fully engaged Newport Fersan and clearly indicated its dissatisfaction with the explanation,” Tufton said.
The minister said that, based on various investigations carried out within the region, retail prices were lower in the main than the ex-factory prices at Newport Fersan and lower in every instance than local retail prices.
Additionally, Tufton said an analysis was carried out on the ex-factory prices of four main types of fertilisers and the total CIF value and other charges to ascertain the manufacturer’s differential.
The minister said the average differential price on four fertiliser types is 39 per cent.
Tufton said, given these findings, the ministry requested that Newport Fersan provide an explanation for its price differential.
“In response, Newport Fersan advised the ministry that it was not its policy to do so,” he said.
John Allen, Newport Fersan’s general manager, told The Gleaner yesterday that a breakdown between production cost and profit margin was the only information regarding its pricing strategies that has not been provided to the Government.
“We are not a public company,” said Allen.
He said Newport Fersan’s prices were justified as several factors had driven up the large increases, such as China imposing a 135 per cent export duty since April on fertiliser, plus continued rises in the price of grains and oil on the world market.
“What are we to do, absorb those costs without passing on to the trade? We can’t,” he added.
Allen said, based on his information, Newport Fersan’s ex-factory costs are comparable with those across the region.
Tufton noted it was not the Government’s intention to drive Newport Fersan out of business. He said, too, that importation of fertiliser by the Government would be a temporary venture.