Why hasn't the export stopped when the domestic fertiliser price has increased?

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The increase of fertiliser prices was mainly due to factors such as raw material prices, increased freight rates… not due to insufficient supply. Photo: collected

Priority should be given to domestic production

For the story of high fertiliser prices, Mr. Hoang Trung, Director of the Plant Protection Department (MARD) analysed that the Vietnam's economy has a large openness, fertiliser prices had increased sharply since the beginning of the year due to the impact of the world fertiliser market. In the context of the complex development of the Covid-19 pandemic, the price of input materials for fertiliser production has increased sharply. There are types such as ammonia and sulfur up to 50-120% from the same period last year.

At a recent meeting of the Plant Protection Bureau with fertiliser enterprises such as Phu My Fertiliser, Ca Mau Fertiliser and large enterprises of Vietnam Chemical Group, these enterprises said that they had increased fertiliser production output in the first 6 months of the year, especially some fertilisers with an increase of 15-30%.

In the context, many opinions say that priority should be given to goods for domestic consumption, and price stabilisation for farmers is essential.

“It is necessary to have policies to limit fertiliser exports such as suspending exports, increasing export taxes and increasing supply resources by temporarily suspending the imposition of safeguard duties on fertilisers that Vietnam has not produced yet enough such as DAP, MAP” Dr. Vo Mai, Vice President of the Vietnam Horticultural Association, said.

Phung Ha, Vice President and General Secretary of the Vietnam Fertiliser Association, said that in order to harmonise the interests of producers and farmers in the context of continuously increasing fertiliser prices, it was advisable to consider suspending exports soon fertiliser, and at the same time it was necessary to require manufacturing enterprises to maximise production capacity to ensure domestic supply. In addition, the flexible use of tax rate tools such as import tax reduction, export tax increase, specific calculation and transparency of trade remedy tax would be an effective solution to "be down" fertiliser prices.

Not enough foundation to suspend exports

According to the Bureau of Chemicals (Ministry of Industry and Trade), in the first six months of this year, Vietnam imported about 2.3 million tonnes of fertiliser, up 15% over the same period in 2020; Exported about 667,000 tonnes of fertiliser, up 44.7% over the same period last year. Although the export volume increased in the first 6 months of the year, the total supply from domestic production and import reached over 6.6 million tonnes. After deducting the amount of fertiliser exported, the amount of fertiliser still basically met the domestic demand, so there was not enough foundation to suspend fertiliser export.

Nguyen Van Thanh, Director of the Bureau of Chemicals analyzed taht the production capacity of domestic fertiliser factories was over 8 million tonnes, import was about 4 million tonnes, basically meeting the consumption demand of about 11 million tonnes. Vietnam was also basically self-sufficient in fertilisers with urea, phosphorus and NPK fertilisers; met about 86% of DAP and MAP needs; only import SA and potassium fertilisers because there are no raw materials in the country.

“There was a time when fertiliser demand increased suddenly, so there was a temporary shortage of supply. However, farmers should not be worried, not buy fertiliser to store, pushing up fertiliser prices higher; should use fertiliser more economically and effectively,” Thanh said.

To stabilise the market, in the future, the Ministry of Industry and Trade will continue to work with the Ministry of Agriculture and Rural Development and related units to assess and review safeguard measures for DAP and MAP fertilisers in an objective and overall way in accordance with the provisions of the law.

“The Ministry of Industry and Trade will also direct the market management force to strengthen inspection, avoid speculation, hoarding, and increase prices, and at the same time suggest enterprises to step up production, prioritise domestic consumption and restrict exports in order to stabilise fertiliser prices in the domestic market,” the leader of the Chemical Bureau emphasised.