Fertilizer firms expect stocks to pick up in 2017 hinh anh 1A production line of Lam Thao Fertilizers and Chemicals JSC in Phu Tho Province (Photo baophutho.vn)
  Hanoi (VNA) - Fertiliser stocks which suffered a dismal 2016 are expected to rebound this year given long-term rising demand as well as global price hikes, according to industry estimates.

Shares of three of the four biggest listed fertiliser manufacturers on the two national stock exchanges tumbled in 2016, led by Lam Thao Fertilizers and Chemicals JSC (LAS), down 55.2 percent for the year.

PetroVietnam Fertilizer and Chemicals Corporation (DPM) and PetroVietnam Ca Mau Fertilizer JSC (DCM) lost 23.2 percent and 21.3 percent, respectively.

Only Binh Dien Fertilizer JSC (BFC) gained 9.3 percent in 2016 with positive earnings.

Fertiliser manufacturing encountered difficulties in recent years with fertiliser prices continuously falling due to oversupply. In 2016, droughts and salt intrusion in the south negatively affected agricultural production which drove down demand even further.

In addition, fiercer competition from China and ASEAN countries, as well as fake and poor-quality products hurt domestic fertiliser companies.

Both PetroVietnam Fertilizer and Chemicals and PetroVietnam Ca Mau Fertilizer had to lower their business targets following poor performance in the first nine months of last year.

PetroVietnam Fertilizer and Chemicals cut its revenue target by 13.4 percent for 2016, from 9.1 trillion VND (402.7 million USD) to 7.9 trillion VND, and decreased its net profit by 18 percent to 1.14 trillion VND.

PetroVietnam Ca Mau Fertilizer trimmed its 2016 revenue target by 13 percent from 5.85 trillion VND to 5.1 trillion VND and net profit from 648 billion VND to 620 billion VND.

Lam Thao Fertilizers and Chemicals performed worst when its nine-month revenue and net profits dropped 18.3 percent and 57 percent, respectively year-on-year.

Binh Dien Fetilizer saw its revenue and profit go up 15 percent and 19 percent, respectively.

The end of the El Nino phenomenon is expected to improve weather conditions to support agricultural production in the south and drive demand for fertiliser.

In addition, the global fertiliser market is starting to firm up in 2017 amid expectations that demand in Europe, the US and Latin America will pick up after five years of decline. Prices of major products like ammonia, urea, phosphates and potash began rising early this year.

With a positive outlook on the global market, Vietcombank Securities Co has suggested investors consider investing in fertiliser stocks this year.

According to analysts at VNDirect Securities Co, fertiliser companies often pay high and stable dividends and stock prices have declined steeply. With high expectations of rising demand and prices, fertiliser stocks are forecast to pick up  this year.

However, they said fertiliser prices can only rise drastically if the sector receives the Government’s support through tariff protection measures to compete with imported products. Besides, domestic companies hope the Government will exempt fertiliser products from VAT.-VNA