Farmers fret over high fertiliser prices during growing season

A strong increase in fertiliser prices during June has caused farmers, who need to spray their summer-autumn crops, much worry, according to the Ministry of Industry and Trade’s Market Watch Team.

Le Quoc Phong, deputy chairman of the Viet Nam Fertiliser Association and general director of the Binh Dien Fertiliser JSC, confirmed that urea and DAP prices have increased since the beginning of June due to the rise of input costs and global demand.

Urea prices have increased to VND10,000 from VND9,200 per kilo, a rise of nearly VND1 million per tonne.

In order to stabilise fertiliser prices, the Binh Dien Corporation has not increased the price of NPK fertiliser.

Phong added that, although the Phu My fertiliser plant had assisted in stabilising domestic fertiliser prices, the plant had temporarily ceased operating in order to undergo maintenance, causing a domestic fertiliser price hike, approximately equivalent to the global price.

On June 15, the Phu My Fertiliser Company officially restarted operations with a production capacity of nearly 2,400 tonnes of urea fertiliser per day, easing tensions on the domestic market.

The wholesale price of urea fertiliser, produced at the Phu My factory, came to VND9,500 per kilo between June 16 and June 30 while urea fertiliser imported from China came to VND9,700 per kilo and DAP fertiliser, also imported from China, came to VND14,100 per kilo.

The Ministry of Industry and Trade reported that locally produced urea would reach 50,200 tonnes or 57.6 per cent of its total production plan only.

The ministry estimates that the fertiliser market would see considerable changes due to export tax reductions in the Chinese market while fertiliser prices continue rising in the world market in June.

Urea fertiliser demand currently ranges between 2 to 2.2 million tonnes per year. It is expected that Viet Nam would be able to produce 3.22 million tonnes of urea fertiliser a year by 2015.

The country has two urea fertiliser factories including Ha Bac Nitrogenous Fertilizer, with a production capacity of 180,000 tonnes per year, and the Phu My Fertiliser Company, with a capacity of 740,000 tonnes per year, which had been expanded to 800,000 tonnes since the fourth quarter of last year.

Fertiliser supply currently stands at between 920,000-980,000 tonnes a year in comparison with actual demands of 2-2.2 million tonnes per year.

According to the Viet Nam Chemistry Group (Vinachem), Nitrogenous Fertilizer, to be produced by the Ninh Binh Plant, will reach 560,000 tonnes per year by November.

The Ca Mau Fertiliser Plant, with a capacity of 800,000 tonnes per year, is set to be completed by the end of this year while the development of the 560,000-tonne Cong Thanh Fertiliser Plant will be kicked off later this year.

By building more plants between 2010-14, urea output will rise to over 3 million tonnes by 2015.

It is predicted that, by 2015, the domestic urea fertiliser market share will experience much competition between local manufacturers and importers .

In order to stabilise prices for the summer-autumn crop, fertiliser manufacturers should develop detailed production plans in order to reduce imports while still meeting domestic demands, said Nguyen Hac Thuy, vice chairman of the Fertiliser Association of Viet Nam. — VNS

Tags: Vietnam Fertiliser prices