Wednesday, 16 February 2011


The Assoiation of Indonesia Fertilizer Producers (APPI) estimated production of urea fertilizer would reach 7.137 million tons in 2011, or up by 6% against 2010 by 6.6 million tons. Meanwhile demand for urea fertilizer in 2011 is projected at 5.1 million tons. Beside Urea, production of NPK fertilizer is projected to reach 2.805 million ton by end of 2011. The figure is slightly lower than projection for 2010 at 7.3 million tons, while production of SP fertilizer would reach 750 thousand tons by 2011.

Data of the Ministry of Industry has it that need for urea fertilizers will still be increasing in 2011. Today the capacity of urea fertilizer production is posted at 8 million tons, but the output of 2010 was only 6.6 million tons. With the expansion plan of some fertilizer factories in 2011, production target would remain to be attaied. Among the fertilizer producers who plan to expand is PT Pupuk Kalimantan Timur V (PKT V) in Bontang who plan to build a new plant worth US$ 828.6 million.

Pursuant to the revitalization plan of the national fertilizer industry, the Government plan aging factories and develop multi-purpose fertilizer (NPK). The seven aging plants are one unit of plant belonging to PT Pusri, one unit of PT Petrokimia Gresik, one unit of PT Kalimantan Timur (PKT), one unit PT Kujang, and one unit of PT Pupuk Iskandar Muda ( PIM ). In term of execution, in the next four next years the government would focus effort on re-structurization of three fertilizer plants, i.e. the fertilizer plant of Kujang, PKT and Pusri. According to government’s estimate, development of fertilizer plant would go in tandem with the growing need of national fertilizers.

In 2011 the ministry of Agriculture allocate fund for subsidy amounting to Rp. 16.38 trillion for attaining a volume of 11.28 million tons of fertilizer. The strategy of fertilizer subsidy is still felt necessary to support objectives in agriculture for 2011. Today a regulation is being prepared by the Ministry of Agriculture on the need for Ceiling Retail Price (HET) of subsidized fertilizers for the agricultural sector in 2011 after getting approval from the ministry of Finance.

The size of fertilizer subsidy for 2011 is less compared to that of 2010 which was posted at Rp 148.41 trillion. Reduction of subsidy fund for 2011 is adjusted to absoption level of fertilizer at farmers stage which tend to lower. Farmers are beginning to realize that application of excessive chemical fertilizers might damage soil and tends to lower plantation productivity. For 2011 the government set target for rice production amounting to 58.8 million tons of Dry Milled Grains (GKG), 22 million tons of dry flakes, 1.01 million tons of soybeans and 3.87 million tons of sugar.

In line with the use of subsidized fertiklizers, farmers in some areas in Biruen are now having planting season. The problem is they admit that it is getting hard to obtain subsidized urea fertilizer. Farmers are not aware of the cause of problem. If this were let to continue to happen, it is feared that the price of fertilizers will increase, the same grievances was also voiced by some farmers in the regency of Peudada, Jeumpa, and Peusangan, and some other regencies. Farmers informed that scarcity of fertilizer have been going on for the past one month.

Today the price of subsidized fertilizer in the free market is Rp 2,00.-/kg or Rp 85,00.- per sack, while the formal ceiling price (HET) is supposed to be 80,00 per sack of Rp 1,600.- per kg.

Farmers in the Regency of Rembang are confused in trying to find urea fertilizers because stock of fertilizers suddenly disappear from the market. Even if there were any, farmers have to edge one another to get share due to limited stock. Scarcity of fertilizer was beginning to be felt by farmers since December 2010.of the proposed Definitive Plan for Group Need ( RDKK ) amounting to 32 ton proposed by 4 farmers group in the village of Pamotan, Regency of Rembang, not all are being distributed. The same thing was experienced by farmers of the village of Bogorame, District of Sulang. The total area of ricefleds in the village of bogorame today is 40 ha to 50 ha.

According to the Agricuture and Forestry Division (Distanhut) of the Regency of Rembang, the fertilizer problem at beginning of planting season (MT I ) occurred because the Permentan Regulation and Governor’s Regulation (Pergub) on allocation and HET of subsidized fertilizer for 2011 had not been issued. The result was that the Regency Government referred to the old regulation whereby to fulfill farmers’ need

The case was different in the areas along the northern coastline of java. Survey and monitoring over farmers toiling on land showed that they have no difficulty in finding urea or NPK fertilizer,- monitoring over authorized distributors or trade in market, including warehouses of Pupuk Kujang showed that stock was abundant. In the warehouse in subang today there are 875, 10 tons of urea fertilizer being stored whilst NPK fertilizer is posted at 337, 40 tons.

Meanwhile restructurization at State Owned Enterprises (BUMN) in Indonesia finally takes place. Since January 11 2011, a new fertilizer company was founded, namely PT Pupuk Sriwidjaja (Pusri) Palembang. This new company stemmed from Spin Off PT Pusri (Persero) as holding company. With the change of status from operating holding into holding, PT Pusri would be more focused in their effort on synergic collaboration of operational corporations among subsidiary companies especially in production and marketing. With the founding of PT Pusri Palembang, furthermore there will be five fertilizer producing companies under PT Pusri (Persero), i.e. Pertrokimia Gresik (Petrogres),PT Pupuk Kaltim (PKT),Pupuk Iskandar Muda (PIM) and PT Pusri Palembang and two non fertilizer producing companies,i.e PT Rekayasa Indusrti and PT Mega Eltra.

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