Virtual fever pushes fertilizer prices

Fertilizer prices have increased strongly over the past two weeks as a result of a firmer dollar and increasing rice prices although the nation has a profuse supply of fertilizer.Farmers in the Mekong Delta have bought fertilizer at 10%-15% higher than early last month. The urea price in An Giang Province is now at VND6,600 per kilo, an increase of VND1,000 per kilo over the previous week.

DAP (diammonium phosphate) fertilizer imported from China jumped to VND6,800 per kilo while the Philippines’ product is VND12,200. NPK (nitrogen, phosphorus, potassium) and kali have also increased in prices.

Fertilizer prices rose like a natural response after rice prices soared sharply. Last year, DAP surged to over VND20,000 per kilo in the rice price fever in April.

Fertilizer importers increased prices of foreign products as the dollar appreciated late last month. “We also face difficulties in buying foreign currencies to pay for overseas shipments,” said an importer.

Meanwhile, local retailers have also raised fertilizer prices, in the belief that farmers would be willing to buy after earning more money due to rice price increase. The two accidental causes pushed fertilizer prices up, said Nguyen Dinh Hac Thuy, vice chairman of the Fertilizer Association of Vietnam.

Vietnam is expected to consume between eight and nine million tons of fertilizer in 2009, or nearly the same as last year’s figure, said the Ministry of Agriculture and Rural Development.

Vietnam imported nearly four million tons of fertilizer last month, up by 35% year-on-year. Urea import volume also doubled to 1.2 million tons, higher than urea demand in the country.

Enterprises have boosted imports as the global fertilizer price has dropped due to the economic downturn. In November, as fertilizer imports surged by 35% in volume, the value fell by 15% against last year.

PetroVietnam Fertilizer and Chemicals Corp., owner of the Phu My fertilizer factory, has announced to launch a huge amount of urea into the market to douse the virtual fever. The factory can turn out over 750,000 tons of urea per year.

Vietnam National Chemical Corporation has a stockpile of 660,000 tons of fertilizer and will launch the product to stabilize the market.

* Vietnam National Oil & Gas Group has asked for permission to export 30,000 tons of urea fertilizer produced by its subsidiary, Phu My Nitrogenous Fertilizer Plant in Ba Ria-Vung Tau Province.

The nation’s urea supply has exceeded demand due to domestic production and large import volume this year.
Vietnam imported over 1.7 million tons of urea during the first 11 months of this year, a nearly double year-on-year, while Phu My and Ha Bac nitrogenous fertilizer plants can turn out 900,000 tons. The local demand, however, is only around 1.7 to two million tons each year.

An official from the Ministry of Agriculture and Rural Development supported the proposal due to a large volume of urea in excess in the future. The nation’s urea output will soar to 2.2 million tons after Ca Mau and Ninh Binh fertilizer plant projects start operating, he said.

Local enterprises earlier asked the Ministry of Industry and Trade to re-export the surplus volume of urea that had been imported to Vietnam.

The Saigon Times Daily

Tags: Vietnam fertilizer prices