NongHyup Expands Fertilizer Price Support, Capping Farmer Costs at 5.4% Increase

NongHyup, in collaboration with the government and local municipalities, is launching a 72.3 billion won initiative to subsidize fertilizer prices for farmers. This program aims to cushion the impact of rising fertilizer costs, which have seen a significant increase from suppliers.

Despite a 27.8% jump in fertilizer prices from manufacturers, the support package is designed to cap the price increase for farmers at 5.4%. The initiative allocates 27.1 billion won from the government, 18.1 billion won from local authorities, and 27.1 billion won from NongHyup itself.

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The fertilizer price support project will be promoted by investing a total of 72.3 billion won with the government and local governments.

Concerns over fertilizer supply stability emerged earlier this year due to geopolitical tensions in the Middle East affecting urea imports. NongHyup has been working with domestic fertilizer companies to diversify import sources to Southeast Asia and secure essential raw materials in advance of the farming season. They have also implemented a pre-order system since October and established a joint task force to monitor raw material supply and market conditions, which they state helped freeze prices for approximately 100 days.

However, the prolonged conflict and high exchange rates have driven up the costs of key raw materials like urea and ammonia by 77% and 80%, respectively, underscoring the ongoing challenges in the fertilizer market.

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Although the fertilizer companies' supply prices have risen by an average of 27.8%, the price increase borne by farmers will be lowered to about 5.4% through the support project.