10:31 | 07/03/2016 Economy- Society
(VEN) - Domestic fertilizer prices are forecast to fluctuate less this year thanks to abundant supplies in the domestic market despite increasing fertilizer demand during the winter-spring crop.
The domestic fertilizer market is predicted to remain stable this year
Stable fertilizer prices
According to the Ministry of Finance’s Price Management Department, fertilizer demands began to rise in December 2015. However, farmers waited for further price decreases. In the north, urea fertilizer prices were quoted at VND8,000-8,300 per kg, down by VND100 per kg compared to November, while in the south they were quoted at VND7,500-8,000 per kg, down by VND200 per kg.
The Tax Law that took effect from January 1, 2015 stipulated that fertilizers were not subject to value added tax, so fertilizer producers would not benefit from VAT refunds from bought materials and subsequently production costs increased. However, they won’t increase fertilizer prices in the first quarter due to moderate demand in the north and Central Highlands, abundant domestic supplies and a global downward trend in fertilizer prices.
Fertilizer prices began to increase in May and June due to reduced domestic supply from fertilizer plants undergoing maintenance. In July, fertilizer prices began to reduce slightly and have remained stable until now.
According to the Price Management Department, urea fertilizer prices were quoted at VND7,800-8,500 per kg in 2015, down by VND200-500 per kg compared to 2014. Fertilizer prices are forecast stable in this winter-spring crop thanks to abundant domestic supplies.
Competitive fertilizer prices
According to the PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo), last year was a prosperous year for the company as the Phu My Fertilizer Plant’s total output reached 851,000 tonnes, meeting 109 percent of the annual plant, which were valued at VND9.818 trillion, meeting 106 percent, and generated VND1.875 trillion, equivalent to 145 percent of its annual profit target.
This year will be a difficult year for PVFCCo on account of costlier materials for fertilizer production and oversupply of fertilizers in the domestic market. However, PVFCCo has devised solutions to these difficulties. In addition to maintaining stable supplies of urea fertilizers during the winter-spring crop via links with other urea fertilizer producers including Ninh Binh, Ca Mau and Ha Bac, it will manage to increase exports, said PVFCCo General Director Doan Van Nhuom.
According to General Secretary of the Vietnam Fertilizer Association Nguyen Hac Thuy, domestic fertilizer prices remained stable last year thanks to abundant supplies and somewhat decreased compared to the previous year.
The domestic fertilizer market is forecast stable this year as several new fertilizer plants will begin production, apart from current domestic production and imports. Farmers will probably benefit more from decreased fertilizer prices.
Kim Lien & Nguyen Duyen