Fertilizer Markets and Agricultural Production Incentives - Tegemeo ...

TABLE 8.3 PORT TO FARMGATE COST BUILD-UP FOR DAP FERTILIZER (APRIL, 1999): CHANNEL
3, con’t.
42 Wholesaler/distributor’s transport costs Kitale - Matunda 30
43 Handling Costs (cost of unloading (receiving) and loading (selling) fertilizer 0
44 Labor costs to repair torn bag 0
45 Transit losses 28
47 Storage Costs(rent, labor, security, electricity) 4
48 Cost of credit 1
49 Opportunity cost of capital 4
50
51 Total Wholesaler Costs (lines 40 + 41) 1867
52 Wholesalers’ actual selling price (from survey data) 1887
53 Wholesalers’ net margin (lines 52 - 51) 20
54 % mark-up of wholesaler (lines 53/53) 1.06
55
56 SMALL-SCALE RETAILER
57 Retailer buying price 1887
58 Operating Costs (lines 59 to 67) 66
59 Retailer transport costs (from wholesaler) 0
60 Handling Costs (cost of unloading (receiving) and loading (selling) fertilizer 0
61 Labor costs to repair torn bag 0
62 Transit losses 47
63 Rebagging 10
65 Storage Costs(rent, labor, security, electricity) 8
66 Cost of credit 1
67 Opportunity cost of capital 0
68
69 Total Retailer Costs (lines 57 + 58) 1953
70 Retailer actual selling price (from survey data) 2000
71 Retailer net margin (lines 70 - 69) 47
72 % mark-up of retailer (lines 71 / 70) 2.35
73 Transport to farmgate (assuming matatu and boda-boda used) 80
74 FARMGATE PRICE (lines 70 + 73) 2080
Source: 1999 Fertilizer Trader Survey
1 Average number of bags of all types of fertilizer purcahsed per fertilizer trading season = 1,000,000
2 Source: Fertilizer Market Bulletin; Bureau of Labor Statistics
3 Shorehandling includes: unloading from the ship; rebagging; and loading onto the trucks. These services
are provided by KPA personnel.
4 Average number of bags of all types of fertilizer purcahsed per fertilizer trading season = 128,000.
5 Average number of bags of all types of fertilizer purcahsed per fertilizer trading season = 1200.
* Supplier delivers when trader purchases at least 100 bags
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