Government bans export of urea fertilizer

JAKARTA (JP): The government has banned the export of urea to prevent a shortage of the fertilizer at home, especially with the start of the planting season in October.

The director general of chemical, farm and forest products at the Ministry of Industry and Trade, Gatot Ibnu Santoso, said on Wednesday that the ban was imposed to prevent a scarcity of the fertilizer in the domestic market.

He said the fertilizer supply had sharply declined lately due to damage occurring in the production units of PT Pupuk Sriwijaya (Pusri) and PT Petro Kimia Gresik, which are the country's major urea producers.

"We have to save up (for October) because the Pusri and Petro Kimia Gresik factories are not producing normally," he told Bisnis Indonesia.

Gatot said urea production at Pusri had declined by 200,000 tons since damage occurred in its production units recently.

Total production capacity of urea in the country is 6.8 million tons a year.

In 1999, exports reached 2.29 million tons, and during the period of January 2000 to March 2000, it reached 457,000 tons.

The price of the fertilizer has risen sharply to over Rp 1,250 per kilogram from less than Rp 500 per kilogram last year. The sharp increase in the cost of urea has severely hurt farmers, who mostly rely on it for crop cultivation.

The government has lowered the price of natural gas sold to fertilizer producers in a bid to lower the price of urea.

But Minister of Agriculture M. Prakosa said on Thursday that the measure could not guarantee a drop in the price of urea.

Gatot said gas prices for the fertilizer industry were cut by 25 percent to US$1.20 per million British thermal unit (MMBTU). (10)