Prices of many fertilizers keep on their uptrend

Reports from the fertilizer sector reveal fertilizer prices on the market are still at a high level on the first days of December.

On December 8, retail prices of Urea, Hong Ha DAP and Potassium flakes in the Mekong Delta stood at VND890,000 - 930,000/bag (VND17,800 - 18,600/kg), VND1,250,000-1,300,000/bag (VND25,000-26,000/kg) and VND850,000-900,000/bag (VND17,000-18,000/kg) respectively.

Also on December 8, retail prices of Urea and Potassium flakes in the Southeast were about VND900,000-980,000/bag (VND18,000 - 19,600/kg) and VND860,000 - 890,000/bag (VND17,200-17,800/kg) respectively.

Thus, after reaching the highest level in November (sometimes it was up to VND1 million/bag), the price of Urea fertilizer tends to decrease in the Mekong Delta, but still remains at a very high level in the Southeastern region.

The high prices of all kinds of fertilizers are causing great obstacles for the production of the winter-spring crop 2021-2022 in both the Southeast and the Mekong Delta. And yet, prices of some key fertilizers are forecasted to increase in the coming time.

Vinacam Group has just announced the fertilizer situation in December 2021 and the first quarter of 2022. Accordingly, tensions and limitations in the world supply chain are continuing to affect agricultural production.

After a long uncontrollable increase, Urea and SA fertilizer prices peaked in November then tended to level off from the beginning of December, especially for clear grain Urea. Potassium powder price is forecasted to remain stable at VND13-13.5 million/ton and this trend is likely to last until February 2022.

The price of Potassium flakes alone will continue to stand at a high level of VND17-17.5 million/ton and reach VND18 million/ton by the end of the first quarter of 2022 due to a scarce supply in the world market.

DAP fertilizer price will maintain the upward momentum since China's decision on export ban along with that, Russia has also made a move to tighten export quotas for Nitrogen fertilizers and nitrogen-containing synthetic fertilizers from December 1, 2021, to May 31, 2022. It is expected that the wholesale price of brown DAP will soon exceed VND23 million/ton, Hong Ha green DAP and Korean DAP will be VND24-25 million/ton.

Also according to Vinacam, domestically produced DAP fertilizer continues to be scarce due to an unimproved situation of apatite ore. In such conditions, 64% DAP of Duc Giang Chemical can be delivered from December under contracts signed in October, but the price after transporting to Ho Chi Minh City has reached over VND20 million/ton.

With the above prediction on the fertilizer market, Vinacam believes that, except for DAP and Potassium flakes, which can be purchased in advance for the production plan, other materials should only be purchased in moderation according to the production plans.

Some fertilizer experts commented the fact that Russia and China, the world's two leading fertilizer exporters, have both issued export restriction measures causing great impacts on the world fertilizer market, in general, and Vietnam in particular, not only in the last months of the year but also the first half of 2022 as well.

Besides these two countries, Turkey, one of the major fertilizer-producing countries in Europe, recently has also stopped exporting many shipments. The fact that a series of major fertilizer exporting countries in the world simultaneously restrict exports may cause the world fertilizer prices to continue increasing at a record high in the first half of 2022, thereby having a significant impact on Vietnam.

According to Agromonitor, the MOP fertilizer market in Southeast Asia has made a record price of USD700/ton (CFR price - including freight and freight) in the context of scarce supply increasing. Meanwhile, Urea's price in early December tended to reverse to the downside in some markets.