Fertilizer Stock

Don’t Worry, This is the Fertilizer Stock Update This Month

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Topik Pembahasan

As of the end of June, Pupuk Indonesia, a state-owned enterprise that’s responsible for most fertilizer distribution in Indonesia, assures farmers that the stock of fertilizer is secure. Pupuk Indonesia, the parent company of 10 different fertilizer producer companies, prepares stocks of fertilizer to meet the allocation that has been determined by the government. The company noted that the stock of subsidized fertilizers in line III, which is up to the distributor level, reached 438,624 tons as of the end of June 2022. 

That number consisted of 224.906 tons of urea fertilizer, 186.941 tons of NPK fertilizer, 2.393 tons of SP-36 fertilizer, 2.398 tons of ZA fertilizer, and 21.986 tons of organic fertilizers. These available stock of fertilizers have met the allocation that is determined by the government. 

“Pupuk Indonesia continues to provide subsidized fertilizers in the market, especially in line III so that they can be quickly distributed when needed. For example, it can be seen from the Urea and NPK stocks which are 164% and 211% respectively of the minimum requirement in line III,” said SVP of Corporate Communications for Pupuk Indonesia, Wijaya Laksana, as reported by Detik. 

Wijaya also added that all subsidized fertilizer stocks at the distributors were distributed to the kiosk level per the Decree (SK) of the Provincial and Regency or City agriculture Offices as a derivative rule of the Minister of Agriculture Regulation (Permentan) No. 41 of 2021. The Minister of Agriculture Regulation (Permentan) regulates the allocation of subsidized fertilizers in 2022. 

“As a producer, we distribute subsidized fertilizers according to the allocation set by the government,” said Wijaya.

Efforts by The Fertilizer Industry to Maintain Smooth Fertilizer Distribution 

As a representative of Pupuk Indonesia, Wijaya also urged farmers and distributors alike to follow the provisions set by the Ministry of Agriculture to receive subsidized fertilizers. These provisions are, that the farmers must join a farmer group, work on a maximum of two hectares of land, and prepare a Definitive Plan for Group Needs (RDKK) to be inputted into the Electronic System Definitive Plan for Group Needs (E-RDKK) by local agricultural extension officers. 

The government regulation also applies to all distributors and authorized kiosk owners. They have the responsibility of checking farmers’ credentials when requesting to purchase subsidized fertilizer and report the availability of fertilizer to be updated to the Ministry of Agriculture. Wijaya also noted that Pupuk Indonesia will not hesitate to take firm action against distributors and authorized kiosk owners who are found to have violated the law. 

In addition to coordinating with the Fertilizer and Pesticide Supervisory Commission (KP3), Pupuk Indonesia also continues to strengthen the process of monitoring the distribution of subsidized fertilizers. The monitoring starts from factories (line I), provincial-level warehouses (line III), and district-level warehouses (line III), to official kiosks at the kiosk level (line IV). 

This year, due to the effect of the pandemic on Indonesia’s economy, the government announced a cut of subsidized fertilizer in the national state budget. The state budget for subsidized fertilizer this year is Rp 25,3 trillion, a 13,06 percent cut from the previous year of Rp 29,1 trillion. As the budget was reduced, there was a rise in the abuse of fertilizer in the market. From the circulation of fake fertilizer that contains harmful substances to a repackage of subsidized fertilizer into a non-subsidized fertilizer in an effort to raise the price. 

These irresponsible actions lead one of Pupuk Indonesia’s subsidiaries PT Pupuk Kalimantan Timur (Kaltim), to work together with the Regional Police Chief (Kapolda) and the Prosecutor’s Office (Kejati) in one of their areas of responsibility, East Kalimantan Province. The cooperation includes security services and escorting the distribution of PT Pupuk Kaltim fertilizers in the region. With the help of local authorities, PT Pupuk Kaltim hopes to reduce the abuse of fertilizer in the region and supply fertilizer to the intended farmer. 

“PKT will cooperate with Polda Kaltim for assistance and distribution security so that subsidized fertilizers can be properly distributed to farmers who are entitled to receive according to the allocation set by the government,” said Rahmad Pribadi, President Director of Pupuk Kaltim.

The Stock of Raw Materials for Making Fertilizer is Still Safe

Currently, Indonesia still needs raw materials that come from imports for making NPK fertilizer. Raw materials such as Phosphate and Potassium were previously majorly supplied by Russia. But as the conflict between Russia and Ukraine continues, the Indonesian government along with fertilizer producers in Indonesia tries to find new suppliers for them. 

“We need to secure the stock because Phosphate and Potassium are raw materials from mining products that are not available and cannot be produced domestically,” explained Bob Indiarto, Pupuk Indonesia Director of Production.

Last month Pupuk Indonesia signed a collaboration with a Jordanian company, Jordan Phosphate Mines Co. Plc (JPMC) to help secure the supply of fertilizer raw materials. Not only that, but Pupuk Indonesia also ensures the supply of raw materials by working with other suppliers from other countries such as Canada and Middle Eastern countries. Making the supply of raw materials for NPK fertilizer is within safe limits for smooth production until the end of the year.(Demfarm/Safaanah)

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