Fertilizer production 'suffocated' because of the shocking increase in coal prices by over 54%

In an official letter to TKV, Van Dien Fused Phosphate Joint Stock Company, a fertilizer enterprise under the Vietnam Chemical Group (Vinachem), mentioned the causes affecting fertilizer prices. Van Dien Fused Phosphate Joint Stock Company said that the outbreak of the Covid-19 pandemic and the Russia-Ukraine war had impacted almost all commodities in the world. The fertilizer industry was the most brutal hit.

Accordingly, prices of raw materials, materials, and services for producing and trading fused phosphate fertilizers increased sharply. At the same time, the purchasing power of farmers decreased sharply because the selling price of agricultural products remained low.

Currently, coal accounts for approximately 50% of the total fuel cost for producing fused phosphate fertilizers. Therefore, TKV's continuous increase in coal price in a short time, up to 54.51% compared to the beginning of 2022, is a shock to fertilizer producers like Van Dien.

The above reason is the first and biggest reason pushing up the production cost of fused phosphate fertilizer of Van Dien Company in recent years, thereby seriously affecting the production and life of farmers. People Citing statistics, Van Dien Fused Phosphate Joint Stock Company said that TKV continuously increased the selling price of coal from March 18 to June 8, 2022.

Specifically, on March 18, 2022, the coal price excluding VAT was VND 3,512,080 VND/tonne, up 13.94% compared to the beginning of 2022; On April 27, 2022, coal price excluding VAT was VND 4,169,500/tonne, up 21.33% compared to the beginning of 2022; On June 8, 2022, coal price excluding VAT was VND 4,762,730/tonne, an increase of 19.24% compared to the beginning of 2022. Therefore, the leader of Van Dien Fused Phosphate Joint Stock Company suggested that the Vietnam Coal and Mineral Industries Group reconsider the adjustment to increase the selling price and the frequency of price increases. In the spirit of "harmonious benefits, share difficulties" to help businesses and farmers have time to "breathe" to recover and stabilize production.

Sharing the same view with Van Dien Fused Phosphate Joint Stock Company, Ninh Binh Phosphate Fertilizer Joint Stock Company also has a "coal" dispatch about TKV increasing the selling price of coal too much and too big.

Accordingly, from June 8, 2022, TKV increased the selling price of coal by 56% compared to the beginning of 2022. The Ninh Binh Phosphate Fertilizer Company said that the time of coal price increase compared to the previous expansion was too close, and the growth was too high. Increasing Coal prices puts fertilizer companies under tremendous pressure when they have to reduce expenses and support farmers, but purchasing power is still slow.

Currently, the Vietnam Coal-Mineral Industry Group has not responded to the legitimate proposals of domestic fertilizer manufacturers on the adjustment of coal prices.