‘Centralized’ fertilizer bidding brought urea prices down

MANILA – The centralized bidding of fertilizers by the Department of Agriculture (DA) is “aboveboard and transparent, and has favorably influenced the retail prices of urea (46-0-0 NPK) to go down to less than PHP1,000 per 50-kilogram (kg) bag.”

“The downward trend of prices of urea shows that we are on the right track in centralizing the bidding process, thus providing our farmers nationwide with affordable and reasonably-priced fertilizers,” DA Secretary William Dar said on Wednesday.

Previously, the prices of urea were hovering at more than PHP1,100 per 50-kg bag.

Dar said the urea fertilizers will be given free to farmers participating under the DA’s Rice Resiliency Project (RRP) under a “buy two, take two” scheme for those who use certified inbred seeds and “buy two, take three” for hybrid users.

The current bidding has set an Approved Budget for the Contract (ABC) at PHP1,000/bag, which is the ceiling price. Bidders that submitted proposals at much lower price than the ABC can be considered for the award if they fully complied with the legal, technical and financial requirements, he said.

The DA Rice Program serves as the “end-user” of the ongoing urea fertilizer procurement being conducted by the agency’s Bids and Awards Committee (BAC).

For transparency, the bidding process is live-streamed via the official DA FB page.

The program based the ABC on the month-long price trends collated by the Fertilizer and Pesticide Authority (FPA) and the Philippine Statistics Authority (PSA).

Based on FPA data, the national average price of urea fertilizer from February to April 2020 was PHP1,051/bag.

After the first and second biddings, some 1.8 million bags were awarded to two companies — La Filipina Uy Gongco Corp and Atlas Fertilizer — offering urea at prices ranging from PHP900 to PHP995 per 50-kg bag.

The fertilizers will be distributed, as per delivery schedule set by the DA Rice Program, directly to municipalities covered under the RRP in four lots, corresponding to four regions: Central Luzon, Calabarzon, Western Visayas and Central Visayas.

The volume awarded to them comprised four of the original 16 lots.

The DA-BAC conducted a third bidding for the remaining 12 lots but this was a failure.

The 12 lots were repackaged into 26 smaller lots to attract more bidders. The bid announcement was published on May 28.

Fourteen prospective suppliers attended the pre-bid conference, on June 5, 2020, but only four submitted their respective bid proposals.

Of the four bidders that participated in the bid opening on June 17, the proposals of the three were considered.

The 4th bidder was disqualified due to non-submission of complete PhilGEPS Certificate of Registration and Membership.

The three suppliers submitted bids only for eight out of the 26 lots. They are currently being evaluated by the concerned DA technical working group. They are: Goldman’s Supply Corp. for North Cotabato; First Planters Agri Solution for La Union, Ilocos Sur and Pangasinan; and Universal Harvester, Inc. for Cagayan, Isabela, Nueva Vizcaya and Quirino.

The DA-BAC expects to complete the evaluation of the three bidders and declare the winners by July 9.

The winners must deliver 50 percent of the urea fertilizers per lot, not later than July 15, 2020, and the rest, not later than July 31, 2020.

There are still 18 lots up for bidding.

Under the DA’s RRP “buy two, take two” scheme, farmers planting certified inbred seeds will first have to buy two bags of urea or complete (14-14-14 NPK) fertilizer, and then show the receipt to their respective municipal or city agriculture officer to avail of the free two bags of urea from the DA.

Farmers planting hybrid rice will get free three bags of urea per hectare for every two bags of fertilizers they bought.

Traditionally, farmers who apply fertilizers only use two bags, at one bag each of complete (14-14-14 NPK) and urea (46-0-0). This is insufficient to get the optimum yield for inbred and hybrid rice. Hence, providing them an additional two bags of urea will help increase their rice yield, secretary Dar said.

The usual recommendation during the wet season for certified inbred rice seed users is 90 kg of N, equivalent to four bags of urea plus three bags of complete (14-14-14) fertilizer and one bag of muriate of potash (0-0-60).

If the DA regional office recommends, based on soil analysis, fertilizers other than urea, then the farmers’ counterpart can be two bags of complete fertilizers.