Workers on a production line of Lam Thao Fertilisers and Chemicals JSC. (Photo: phutho.gov.vn) Phung Ha, general secretary and vice chairman of the Vietnam FertiliserAssociation, said that the prices of fertilisers fell sharply in the first sixmonths of the year, especially urea fertiliser due to the price of inputmaterials such as gas and coal for production falling.
In addition, China has no longer restricted the export of 29 types offertilisers. This move has greatly increased the supply of fertiliser on theworld market, putting downward pressure on prices to promote consumption.
Accordingly, the prices of all kinds of fertilisers have gone down by 60-65%compared to the beginning of last year and tend to be stable at the current lowlevel.
In addition, the demand for fertiliser also declined as it is notthe peak season, which also contributed to pushing prices down.
Many Thai and Chinese firms are coming to Cambodia to invest andbuy ingredients for agricultural production, said Ngo Van Dong, GeneralDirector of Binh Dien Fertiliser Joint Stock Company.
This is a challenge for Vietnamese fertiliser manufacturers in this traditionalexport market, said Dong.
To cope with these challenges, besides the traditional markets of Japan, theRepublic of Korea, Malaysia, Cambodia and Laos, many domestic fertilisermanufacturers have sought to expand their exports to other markets such asTaiwan (China), Brazil, India, Southeast Asian countries and Europe.
Along with the efforts of enterprises to expand the market, the VietnamFertiliser Association recently sent an official dispatch to the GovernmentOffice on solutions to support fertiliser firms in boosting exports throughfavourable tax policies.
Specifically, the association proposed the superphosphate export tax rate be 0%as before, instead of the 5% rate as prescribed in Decree No 26/2023/ND-CPdated May 31 this year.
The association said that the total production capacity of superphosphatefertilisers of factories in Vietnam is about 1.5 million tonnes per year whilethe amount of the fertiliser consumed domestically is less than 500,000 tonnesper year.
On the other hand, statistics of the General Department of Customs show thatthe amount of exported superphosphate is very small, less than 100,000 tonnesper year in 2022.
With the excess production capacity compared to the domestic demand forsuperphosphate fertiliser, exports should be encouraged to increase the valueof national products, create jobs, earn foreign currency for the country, andgrow tax revenue for the locality.
In addition, the fierce competition from Chinese products and cheap pricesmakes Vietnamese superphosphate products less attractive as exports compared toother countries such as China, Morocco, and India, especially if the export taxrate is kept at 5%.
As for urea nitrogen fertiliser, its capacity is 2.5 million tonnes and demandis less than 1.8 million tonnes, therefore, enterprises must export to ensureeffiiency.
If the export tax is imposed, they will lose business opportunities andproduction and efficiency will risk being dampened.
Brunei's entry into the fertiliser market with a supply of 1.8 million tonnesof urea per year, mainly targeting the Southeast Asian market, including ViệtNam, has further increase competitive pressure.
The Vietnam Fertiliser Association proposed to apply 0% export taxon urea fertilisers./.
VNA
