While the arrival of imported urea to Peru is awaited, the head of the Ministry of Agriculture and Irrigation (Midagri), Andrés Alencastre, at a press conference, announced that they have made an emergency decree of the “Fertibono” to provide financial support to producers who have land of less than five hectares with prioritized crops (rice, corn, coffee and potatoes). In addition, he specified that producers will be able to access this subsidy from August 22.
According to the minister, of the 348 million soles earmarked for the international purchase of urea, there will be a balance of around 144 million soles, which will be used to provide a subsidy to producers for the purchase of fertilizer.
The measures adopted by Midagri, he said, are carried out in the face of the urgency and expectation of the 2022-2023 agricultural campaign to guarantee agricultural production, “addressing this risk or expectation of alleged food insecurity.”
“The average price of urea is 211 soles per 50-kilo bag and with this mechanism (fertibonos), what we would be attending to is a subsidy of 138 soles per bag. This should cover the beneficiaries of this provision of economic support or subsidy in the acquisition of urea, and that will reach around 132,000 producers,” Alencastre said.
On the other hand, Alencastre pointed out that Sunat has made 240 tons of urea from their warehouses so that they can be taken immediately to small producers. The official added that “today the collection should already be taking place to take it to Agro Rural”, and after that, distribute it.
On the other hand, the head of Midagri announced that his sector will abide by the suggestions of the Comptroller of the Republic after making observations to the third process of purchase of international purchase of urea.
In that sense, the minister said that they will nullify the good pro of the tender granted to the American company Ready Oil Supply LLC, and they will choose the third company from the finalist list, that is, the Italian Unionsped SRL.
“Given the importance of time and the considerations we have, we have decided to take into account the recommendations made by the Comptroller and move forward with the international purchase of urea, even if it means a higher price in this acquisition. I believe that the times and the urgent situation warrant it,” said Alencastre.
Likewise, the head of Midagri said that “it has been determined to award the good pro to the third company (of the three that were finalists), which is the one that is not objected to under any point of view.”
The Unionsped company, of Italian origin, was one of the three finalists in the international fertilizer purchasing process, but Midagri opted for Ready Oil Solutions before its best price proposal (US$ 580 per ton) which was far from the US$ 623 per ton offered by the Italian firm, Bloomberg online published.
During his explanation of this third fertilizer acquisition process, Alencastre mentioned that the three finalist entities offered prices between US$580, US$600 and US$623 per ton.
“That meant an option that could give us the same time of access to urea in the warehouses of Peru and a single batch in transport and 45 days for arrival. With those prices and opportunity we opted for one, but we received a report with the recommendations of the Comptroller’s Office, “said the Minister of Agriculture.
Alencastre commented that the three key points of the supervisory body were business consistency within three years, urea sales volumes over five years, and the date of incorporation.
Along these lines, the head of Midagri said that this report must be answered in five days, that is, on Friday, August 12, but the pressure of time will take into account the recommendations of the Comptroller.
However, Alencastre did not give details on when the Unionsped contract will be signed so that the 45-day urea delivery period will begin. If it happens in the next few days, the more than 65,000 tons of fertilizer would only arrive in Peru towards the end of September.