Fertilizer prices soar, DAP in serious shortage

Fertilizer prices are soaring

According to some fertilizer traders, the prices of many fertilizers are increasing sharply in the first months of 2020. Urea price soared before the New Year and is continuing to maintain at a high level. On February 21, the prices of Ninh Binh Urea and Ca Mau Urea were about VND 9,000/kg, Phu My Urea VND 8,000/kg. DAP prices after Tet remained high and showed no signs of reducing.

Fertilizer prices in Vietnam have soared because from December 2020 up to now, world fertilizer prices have risen sharply, and container freight rates are 3-5 times higher than before.

According to The Argus magazine, in November 2020, the average FOB price for DAP fertilizer in China is from US$ 35-360/ton, MAP US$ 362-367/ton, Urea US$ 270-275/ton. Also in November 2020, the average FOB price of DAP in the US was US$ 361/ton, MAP US$ 361/ton, Urea US$ 240-259/ton; in Egypt, DAP price is US$ 360-370/ton, Urea US$ 250-256/ton; DAP prices in Russia from US$ 340-350/ton, MAP US$ 343 ton, Urea US$ 230-235/ton; Urea prices in Malaysia and Indonesia are US$ 257-260/ton.

By February 2021, the average FOB price for DAP fertilizer in China rose to US$ 515-520/ton (increased US$ 158-160/ton compared to November 2020), MAP US$ 570-572/ton (increased US$ 205-208/ton), Urea US$ 355-360/ton (increased US$ 85/ton)

Also in February 2021, the average FOB price for DAP and MAP in the US was US$ 530/ton (increased US$ 169/ton), Urea US$ 357-391/ton (increased US$ 117-132/ton); in Egypt, DAP was US$ 535-545/ton (increased US$ 175/ton), Urea US$ 353-380/ton (increased US$ 103-124/ton); in Russia, DAP was US$ 535-540/ton (increased US$ 190-195/ton), MAP US$ 564-565/ton (increased US$ 221-222/ton), Urea US$ 348-365/ton (increased US$ 118-130/ton); Urea in Indonesia and Malaysia increased by US$ 108/ton to US$ 365-367/ton.

A severe shortage of DAP  

At present, the inventory of imported DAP is almost zero, while the spring-summer crop is coming, causing DAP prices in Vietnam to increase rapidly. Compared to November 2020, Chinese DAP (green) has increased by VND 5.1 million/ton to VND 15.5 million/ton, Chinese DAP (brown) is out of stock, Korean DAP has increased by VND 2.7 million/ton to VND 15.5 million/ton.

The factory prices of DAP Dinh Vu and DAP Lao Cai increased VND 900 thousand/ton to VND 9,528 million/ton, while their market prices increased by VND 1.95 million/ton to VND 10.4 million/ton.

With the experience and through a survey of Vinacam’s agencies, a specialist said that there will be a serious shortage of DAP in Vietnam. 

In a letter to the Prime Minister and Minister of Industry and Trade on February 24, 2021, Vinacam said that in the past 3 years, the implementation of Decision No. 686/QD-BCT dated March 2, 2018 of the Ministry of Industry and Trade on applying official safeguard measures to imported DAP and MAP fertilizers has more or less left positive effects on domestic production.

However, at the present time, maintaining safeguard measures to imported DAP and MAP fertilizers is causing a scarcity of DAP, resulting in soaring prices, increased production costs and reduced competitiveness in agricultural exports. And it means that domestic agriculture and farmers are the first to suffer.

Therefore, in order to have enough DAP resources to serve the coming spring-summer crop, in their letter, Vinacam proposed to the Prime Minister and the Minister of Industry and Trade to consider temporary removing safeguard measures on imported DAP and MAP fertilizers, so that import transactions can be carried out as normal from the beginning of March 2021.