Efforts to ensure fertiliser supply

The Viet Nam Fertiliser Association plans to work closely with ministries and agencies to ensure an adequate supply of urea fertiliser for the coming winter-spring rice crop 2010-11.

The southern provinces will enter the winter-spring rice crop by mid-month, but the supply of fertiliser varieties which depend on imports, especially urea fertiliser, has created a false scarcity as many traders have hoarded fertiliser to raise prices.

Nguyen Hac Thuy, general secretary of the association, said global high prices and a rumour about the increased number of urea-fertiliser exports by PetroVietnam Fertiliser and Chemicals Company (PVFCCo) have caused traders to hoard fertiliser in an effort to raise the price.

Since October 18, the world price of urea fertiliser suddenly rose by 20 per cent compared to September.

In addition, many farmers in the south began buying more urea fertiliser to preserve for the coming crop.

These factors have increased domestic prices of urea fertilisers in the south to VND7,800-8,000 a kg, up nearly VND2,000 compared with September, Thuy said.

The demand of urea fertiliser in the work market is expected to increase highly as US urea fertiliser demand will rise because of corn cultivation.

In addition, China, the world’s largest urea fertiliser exporter, has decided to raise its fertiliser export-tax from 10 per cent to 100 per cent in early December.

Despite tension in the supply and price of urea fertiliser on the world market, the domestic market will not face scarcity and price fever as it did during the winter-spring crop in 2008, Thuy said.

PVFCCo has begun, three months ahead of schedule, to collect carbon dioxide from industrial smoke discharged from its fertiliser plant to increase the scale of production.

The carbon-dioxide collection project will allow the company to increase its urea fertiliser output from 740,000 tonnes to 800,000 tonnes per year.

PVFCCo’s Phu My Fertiliser Plant has also helped stabilise domestic prices through its fertiliser distribution network to end clients.

To secure the supply of fertiliser for the winter-spring rice crop and avoid domestic prices from increasing suddenly, agencies have agreed with the petition of the association to temporarily stop exporting fertilisers, except NPK, organic and phosphate fertilisers.

The export halt is expected to last until February 2011 when the winter-spring rice crop 2010-11 ends.

The association has also asked the Government to order commercial banks to give priority to loans in US dollars for fertiliser importers so there will be enough materials for the winter-spring rice crop.

The demand for urea fertiliser for the winter-spring rice crop 2010-11 is estimated to reach 700,000 tonnes, according to the association.

Viet Nam depends heavily on imported fertiliser as the country imports up to half of urea fertiliser products, 70 per cent of DAP fertiliser and 100 per cent of Kali and SA fertiliser. — VNS

Tags: Vietnam fertilizer industry