Fertilisers produced at Bình Điền Fertiliser Joint Stock Company. Domestic fertiliser prices set a new high in the past 50 years. (Photo: VNA) Accordingto the Ministry of Agriculture and Rural Development (MARD), the Russia–Ukraineconflict is badly affecting the fertiliser market, which had already beensuffering supply shortage and price increase from the prolonged COVID-19pandemic as the supply chain was disrupted.
Russiawas one of the world’s major low-cost fertiliser exporters, ranking first inurea, NPK, among nitrate export, third in potash and fourth in phosphate.
Latelast week, Russia’s trade and industry ministry recommended that the country’sfertiliser producers temporarily halt exports in a move that threatened toshock the global market.
China,a significant fertiliser exporter, tightened the export of 29 types of plantnutrition from mid-October last year to cope with the domestic shortage.
Domesticfertiliser prices set a new high in the past 50 years. According to theministry, fertiliser prices rose by more than 20 percent in recent months. Thesoaring prices of oil and gas, which accounted for a significant part ofproduction cost, also pushed up fertiliser prices.
Thestorm of fertiliser prices was forecast to continue when these exportrestrictions were still in place, causing a severe shortage of fertilisers,including potash and DAP.
VinacamGroup Joint Stock Company, one of Vietnam’s leading fertiliser importers, saidthat quotations of urea at 540-560 USD per tonne were all cancelled. Suppliersfrom Egypt increased quotation prices by 140 USD to 730 USD per tonne.
Thismeant that in the short term, urea might climb to around 800-1,000 USD pertonne in April if the oil price reaches 150 USD per barrel. DAP was forecast toreach 950 USD per tonne in April and hit 1,200-1,500 USD soon.
Vinacampredicted that the domestic market would see a severe shortage of DAP in thesecond quarter, and its price could soar to 25 million VND per tonne. Ureacould return to the record of 18 million VND per tonne set in 2021.
Forpotash, Vietnam relied entirely on imports. Vinacam said that potash pricemight soon hit 15-20 million VND per tonne and set a new high of around 24-25million VND.
Theskyrocketing prices of fertilisers are pushing farmers into a cost crisis,threatening to push up food prices. Fertilisers accounted for around 40-60 percentof the input cost of agricultural production. Worse, fertiliser prices souredwhen the summer-autumn crop was coming in April and May.
Theministry pointed out that Vietnam uses around 10 million tonnes of fertiliserseach year. Last year, the country consumed 10.7 million tonnes, up by 4.67 percentover 2020, the ministry pointed out, forecasting the domestic demand forfertilisers was stable this year.
Domesticproducers could supply major fertiliser products like phosphate, urea and NPKto meet the domestic demand.
DomesticDAP production could meet around 60 percent of demand while potash and SAfertilisers were entirely dependent on imports.
ThePlant Protection Department said that it would keep a close watch on the globaland domestic fertiliser market to timely raise measures to ensure agriculturalproduction, urging import companies to look for alternative fertilisersuppliers, especially potash.
TheMARD urged the Ministry of Industry and Trade to consider lifting theimposition of trade defence measures on imported DAP and MAP while enhancingmarket inspections to prevent speculation and fake and low-quality fertiliser.
TheMARD said it was also necessary to review tax policies on fertilisers.
Italso said that farmers should increase the application of new farmingtechniques to reduce chemical fertilisers and replace them with organicfertilisers.
Theministry’s statistics showed that Vietnam must import around 2.7-3.5 milliontonnes of fertilisers each year, of which potash accounted for 25-28 percentand SA 25-31 percent.
Thefertiliser import from Russia made up around 130,000-380,000 tonnes, accountingfor 3-9.5 percent of Vietnam’s fertiliser imports, mainly potash, NPK and DAP.
Lastyear, Vietnam imported more than 5.1 million tonnes, 31.1 percent of which wasSA, and 25.3 percent was potash. Potash was imported from 30 markets. Vietnamimported 320,000 tonnes of fertilisers from Russia in 2021, mostly potash with195,000 tonnes, accounting for more than 15 percent of potash import.
Inthe first two months of this year, Vietnam imported more than 706,000 tonnes,73,800 tonnes of which came from Russia worth 40 million USD. Potash importfrom Russia accounted for 18 percent of the country’s potash import in theperiod./.
VNA
