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Vietnam fertilizer industry in October 2021 – Fertilizer prices increase constantly

Fertilizer prices are continuously increasing both in the country and in the world. Production output of fertilizers gradually recovered in October after reopening the economy.

World fertilizer prices continuously increased sharply from the beginning of Oct until now, and reached the highest level since 2008. In particular, Urea price suddenly spiked by 200-300 USD/ton in the first week of T10 and continue to keep increasing rate of 5-10% per week.

The reason for the "shocking" increase in the prices of fertilizers was due to increased demand, high coal and gas prices, and China's policy to control the export of urea.

Although the import price of consignments arriving at the port in Oct has not increased sharply, the types of fertilizers shipped at domestic factories and the secondary transaction prices have moved in the same direction as the world prices. In which, Urea was the commodity with the most fluctuations when it increased 35-45% compared to the end of last month, to 15,300-16,000 VND/kg in Ho Chi Minh City. Fertilizer prices in the country continuously increase according to world prices, causing difficulties for agriculture and farmers, especially preparing for the end of the year crop.

Production output of the fertilizer industry gradually recovered after 1 month of opening the economy. Total production of fertilizers in 10M-2021 increased by 7.4%, reaching 5,741.9 thousand tons. In Oct alone, production increased by 6.7% month-on-month, and increased in most fertilizers except for Urea.

While compared to Oct in the same period of 2020, production output is still low. In which, the biggest decrease was DAP, mainly due to lack of Apatite (input material).

Fertilizer price forecast for the last 2 months of the year

The world fertilizer price is likely to continue its upward trend due to a number of reasons such as

(i) High cost of input materials for production;

(ii) Some fertilizer factories had to stop production unexpectedly, causing supply shortage;

(iii) Demand for fertilizers is not only for agriculture but also for some industrial sectors, especially in the post-COVID-19 recovery period;

(iv) Besides China, which is restricting fertilizer exports, Russia recently plans to impose a fertilizer export quota;

(v) In addition, international ocean freight rates are at a record high and are likely to continue to rise.

In the context of a hot increase in world fertilizer prices, domestic fertilizer prices will also be affected and may continue to rise in the near future.

Source: Extracted from Vietdata's November 2021 Fertilizer Industry Report


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