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Fertilizer shortage may put wheat prices in jeopardy
Wheat prices are expected to decline in the coming months as exporting countries enter harvesting season, but the Indonesian Flour Mills Association (Aptindo) says the longer-term trend also depends on fertilizer prices.
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Wheat belt: Russian army trucks drive across a wheat field in the course of the Russian war in Ukraine, near the settlement of Olenivka in the Donetsk region, Ukraine, on July 29. (Reuters/Alexander Ermochenko)
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heat prices are expected to decline in the coming months as exporting countries enter harvesting season, but the Indonesian Flour Mills Association (Aptindo) says the longer-term trend will also depend on fertilizer prices.
After consecutive months of decade-high wheat prices following Russia’s invasion of Ukraine, the grain recently saw a sharp drop in futures prices.
Chicago wheat futures retreated to below US$7.50 per bushel in mid-August, the lowest since January, amid strong supplies from major growing regions.
Franciscus “Franky” Welirang, chairman of Aptindo, said that the domestic wheat supply, specifically of the type usually used to make flour, was secure and he expected wheat prices to slowly decline in the coming months.
“But we need to wait [and see] for a [longer-trend estimate], considering that fertilizer prices are still high. We may see how [currently high fertilizer prices] affect wheat price in March next year,” he told The Jakarta Post on Thursday.
Surging natural gas prices and limited supplies in the past few months have driven fertilizer prices up significantly, especially in the March-May period.
The average price of diammonium phosphate (DAP), phosphate rock and potassium chloride in the January-July period rose by 50, 128 and 142 percent year-on-year (yoy), respectively, World Bank data show.
