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Farmers cannot purchase fertilizer, despite big stocks
Domestic distributors are still trying to keep fertilizer prices at high levels, ignoring the fact that the world’s price has dropped by over 50%, while farmers cannot purchase fertilizer for the crops.
According to the Vietnam Fertilizer Association, the demand for fertilizer for the winter-spring crop in the Cuu Long River Delta provinces is just 700-800,000 tons, while Vietnam still has nearly 1 million tons of imported fertilizer in stock. Moreover, there is also close to 1 million tons of inventory fertilizer made by domestic producers.
The figures show that the supply is now well exceeding the demand. However, the sale price of fertilizer has remained high. The problem lies in the fact that importers are determined to not lower sale prices, saying that they had to import the products at high prices before the prices dropped and they cannot slash prices as it would result in them incurring losses.
According to Nguyen Hac Thuy, Secretary General of the Vietnam Fertilizer Association, three months ago, the urea price was $850/ton, while it has now dropped to $200/ton, the DAP price has dropped from $1,100-1,200/ton to $500/ton, and SA from $440 to $145/ton. Similarly, the prices of materials for fertilizer production have also decreased considerably. Sulfur, for example, had decreased from $1,000/ton to $50/ton.
As such, the sale price of import urea should be VND 3,500/kg, while the price for DAP and kali should be VND 8,500/kg. However, the domestic prices have only witnessed little decreases so far, which keeps the domestic prices far from the world’s prices. DAP is still selling at VND 10-13,000/kg, urea VND 5,300/kg, and kali VND 10,000/kg.
Experts said that the NPK fertilizer price has been reduced by only 20%, while the material prices have reduced by 60%.
Tran Van Tan, the owner of a sales agent in Dong Thap province in the south, said that the high prices have kept farmers away. They still cannot purchase fertilizer, though the rice fields now need fertilizer.
Le Quoc Phong, Deputy Chairman of the Vietnam Fertiliser Association, said that fertilizer importers and distributors have been incurring heavy losses of up to several hundred billion VND. They imported fertilizer in large quantities in mid-year on the forecast that the prices would escalate further. However, in fact, the world’s prices have reduced by a half.
Hoang Le Company said it now still has $4 million worth of fertilizer in stocks. Nguyen Tan Dat, Director of Southern Fertilizer Corporation, said that the company still has 20,000 tons of products imported at high prices, which he thinks will bring the loss of VND 100 billion.
In principle, enterprises need to cut sale prices to clear stocks and stop loss. However, they have not done this, insisting that only when the stocks are cleared, they will think of slashing sale prices.
Nguyen Tri Ngoc, Head of the Cultivation Department, under the Ministry of Agriculture and Rural Development, said that enterprises have asked for a reduction in the export tax and removal the fertilizer export quotas to help them clear their stocks. However, Ngoc said, no quota removal nor tax reduction could not be accepted, since Vietnam needs to have enough fertilizer for agriculture production.
NLD
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