November 23, 2024 | 13:03 GMT +7
Hotline: 0913.378.918
November 23, 2024 | 13:03 GMT +7
Hotline: 0913.378.918
Compared to the period before the Lunar New Year, fertilizer prices have decreased by VND 500,000 - 1,000,000 per ton. Photo: TL.
Over the past year fertilizer prices in the domestic market increased chaotically following an increase in world fertilizer prices then remained at a high level around the Lunar New Year. However, according to Vinacam Group, fertilizer prices are expected to decrease gradually in the near future.
Fertilizer companies and agents reopened for sale on February 8, but there have been almost no significant transactions since then. Fertilizer prices have thus begun to fall. Compared to the period before the Lunar New Year, fertilizer prices have decreased from VND 500,000 - 1,000,000 per ton.
The decrease in all fertilizer product prices is due to many reasons.
First of all, in the short time since 2021 domestic fertilizer prices have increased quickly in accordance with the world's fertilizer price increase rate, causing dealers to stock fertilizers at many different prices, creating significant gaps in the price fluctuation limits.
For example, in early February traders offered potash fertilizer in Vietnam with a wide fluctuation limit. Potash fertilizers in stock have many different costs from either importers, traders, or agents. Thus, while fertilizer prices have decreased by VND millions per ton traders still have a profit of several VND million - a dream profit for many fertilizer businesses.
The main reason for the decline in domestic fertilizer prices is most likely the adjustment of urea fertilizer prices in the world market. In the past month the world urea price has decreased by USD 300 - 400 per ton. This is most clearly reflected in the recent auction of India's 1.5 million tons of urea fertilizer.
The auction of India’s urea has caused the world's urea fertilizer price to come down, also affecting the price of opaque urea fertilizer in Southeast Asia. If importing urea fertilizer from India to Vietnam for approximately VND 14.5 - 15 million per ton, traders will still profit because the current domestic selling price is VND 16.5 million per ton.
The world prices of Diammonium phosphate (DAP) and potassium fertilizers are still high and show no signs of decreasing. On the contrary they are increasing slightly due to China's restriction of DAP exports. India's import demand will be up to 4 million tons in the near future, also improving world agricultural product prices.
Compared to the current world price of DAP, if imported to Vietnam under existing import and trade remedy taxes, the average cost would still be at a high level of over VND 23 million per ton.
As for potash fertilizer prices, there seem to be no discounts from Israeli, Russian, or Canadian suppliers despite Belarus' supply situation being disrupted.
It isn't easy to make an exact prediction for the price of urea fertilizer in the main consumer markets. In Vietnam the prices will decrease in March. A sharp increase in gasoline prices will also cause an increase in transportation prices worldwide. It is therefore forecast that the drop in urea fertilizer prices will slow down and increase somewhat soon. However, according to Vinacam Group, the domestic urea price will barely increase but instead adjust to the downward direction.
Because the domestic supply is almost exhausted, the price of DAP fertilizer will be stable and tend to increase until China's fertilizer exports are back to normal levels. According to Agromonitor, DAP fertilizer exports from China to Vietnam have remained at a low level from November last year until now.
Prices of powdered potassium fertilizers and imported 16-16-8 NPK products will remain steady due to abundant inventories, but potassium flakes will continue to increase in March 2022 to the expected level of VND 17-18 million per ton because the import price has reached USD 750 per ton and there is a scarcity of goods in stock.
When urea prices increase other fertilizer prices will increase, and vice versa. However this year's market has not appeared to follow this rule, especially as DAP and potassium fertilizers are showing signs of rising while urea prices are tending to decrease.
Following the upward trend of fertilizer prices, the business results of fertilizer enterprises recorded positive results in 2021. Nevertheless, profits are forecasted to decrease when fertilizer prices are likely to drop in 2022. Urea fertilizer production companies will be the most affected.
Translated by Ha Phuc
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