Fertiliser prices rise on short supply

Northern provinces have just finished harvesting the autumn crop, while southern provinces are preparing for the winter-spring crop. However, the fertilizer price still has been increasing significantly on the domestic market.

According to Nguyen Hac Thuy, Deputy Chair of the Fertiliser Association of Vietnam (FAV), the fertilizer price on the world market has increased by $40-100 per tone since mid September 2010, while the domestic price has increased by 700-1000 dong per kilo.

There are many reasons behind the fertilizer price increases. However, Thuy said the main reason is that China, a big market which affects the world market, has decided to raise export tariff in order to protect local production and reserve fertilizer for the new crop in the country.

Besides, many other countries in the world are entering the new winter main production crop which requires much more fertilizer than other crops, thus leading to the higher demand. Meanwhile, a lot of fertilizer factories in the world have halted operation for the maintenance period, leading to the shorter supply.

Thuy has denied the statement that domestic enterprises have speculated products to push the prices up. “The thing once occurred in the past, especially in 2008, but not this year,” Thuy said, adding that the domestic fertilizer price heavily depends on the world price.

Since 1990, enterprises have been following the “2 kilos of rice/ 1 kilo of urea” formula. Currently, two kilogrammes of is valued at 10,000 dong, while one kilogramme of urea is priced at 7000 dong. This means that the prices are still within the safety line.

However, Thuy affirmed that the fertilizer price increases will not last for a long time. He thinks the increases will stop by mid October and then decrease towards the end of the year.

In 2008, when the fertilizer price skyrocketed, counterfeit products appeared everywhere on the market. Government agencies discovered 60 establishments which made and traded counterfeit or low quality products in 31 cities and provinces. The Prime Minister then released a document, instructed Government agencies to tighten control over fertilizer products available on the market. “The volume of counterfeit products has reduced by 90 percent,” Thuy said.

The domestic urea production now can meet 50 percent of the demand, while the DAP production can meet15-20 percent, and the demand for NPK can be absolutely met by the domestic production.

Meanwhile, Vietnam still has to import 100 percent of SA and Kali fertilizer needed.

The winter crop in southern provinces will begin by the end of October. It is estimated that the winter-spring crop will need 700,000-800,000 tons of fertilizer of different kinds.-Tien phong

Tags: Vietnam Fertiliser prices, Vietnam fertilizer industry