Fertilizer prices are continually rising – not unlike other input costs. If we take maize, which accounts for roughly 41% of total fertilizer application in South Africa, we see that local farmers are paying a far higher price compared to most key global producers. So, let’s see how you can reduce your input costs.
Why input costs are high
Local prices tend to be influenced by what happens in the global market for the reason that South Africa imports roughly 80% of its fertilizer consumption, and is a small player globally. Exchange rates are important determinants of the South African fertilizer price. Therefore, the weakness of the rand to the US dollar has some impact on increasing fertilizer prices, which is bad news for those trying to reduce their input costs.
Additionally, the increasing diesel price and shipping costs further increase input costs, all adding pressure to farmers.
Transport costs increases input costs
Logistics and the associated costs of getting items from one point to another are a critical issue affecting the entire integrated agricultural value chain. This unfortunately adversely affects those who are trying to reduce their input costs.
• Studies by the IFDC have indicated that the single biggest component of the costs that are added to the landed cost of imports are transport and distribution. Transport costs affect the final selling price of all agricultural inputs. If these costs were lower, the retail price of these inputs would also be reduced.
• Often the nearest source of agri-inputs does not stock all their requirements of the farmer. Some farmers therefore travel to purchase inputs and transport them back to the farm. If these costs are excessive, they may erase the benefits of a reduced retail price for inputs.
Quality of the fertiliser
Unfortunately, counterfeit or sub-standard fertiliser appears to be a significant problem as well. The issue here is that farmers spend a great deal of money on product that is inferior.
Oté has created a way to reduce your input costs
Oté offers a new way of buying inputs such as fertiliser. And the solution focuses on the farmer first. Reduce your input costs by buying online and direct from importers.
Oté ships products directly from the suppliers’ storage or processing plants to the farm and with no fixed costs for a sales force. You should therefore see a substantial saving on the cost of the product.
Further, by making it possible for you to place an order via Oté, who facilitates the transaction with the importer, you can order outside of the traditional procurement cycles affording you the opportunity to buy at a lower price. Please navigate our site and see how we reduce your input costs.