Fertilizer enterprises are poised to achieve record levels of revenue and profit in 2022, building upon the successful momentum of the previous year.
Mr. Phung Ha, Vice President and General Secretary of the Vietnam Fertilizer Association, said that fertilizer prices started to skyrocket from 2020 to now and this is also the strongest increase in the past 50 years.
For example, the consumption output of Ca Mau Fertilizer in 2022 will reach 1,077,000 tons. The company has completed the business plan targets with revenue of more than 16,412 billion dong, reaching 111% of the year plan. PVCFC's total revenue and profit in 2022 recorded the highest level ever.
One of the reasons for the good business results of fertilizer companies, according to Mr. Ha, is the high selling price compared to previous years due to the impact of the Covid-19 pandemic, a sharp increase in freight charges; oil and natural gas prices rose.
From a business perspective, Ms. Nguyen Thi Hien, Deputy General Director of Ca Mau Petroleum Fertilizer Joint Stock Company, said that in 2022, all input costs of the fertilizer industry will increase, leading to high prices. and the market price also increased.
However, the fertilizer industry achieved good results not only due to the increase in selling prices but also due to many other factors. Because of the fact, the high fertilizer price besides the positive impact, maintaining high prices for a long time has been reducing the demand for fertilizer.
It is estimated that domestic demand in 2022 will decrease by 20-30% depending on each region, leading to many difficulties in domestic consumption. Domestic consumption is much lower than the same period of previous years, forcing domestic manufacturers to seek opportunities and boost exports to ensure inventories and maintain production.
According to the Ministry of Agriculture and Rural Development, fertilizer exports officially hit the milestone of more than 1 billion USD since the beginning of the year, reaching more than 1.6 million tons. Vietnam's fertilizer products have been exported to most of the world markets, such as France, India, South Asian countries, markets as far away as South America, Peru, Mexico, the United States ... have also appeared. face.
It is the favorable export of fertilizers that has made a series of names in the fertilizer industry such as Phu My Fertilizer, Ca Mau Fertilizer, a number of units in the Vietnam Chemical Group such as Southern Fertilizer, Binh Dien Fertilizer, etc. . both recorded high profits over the same period.
Also analyzing the reasons for the increase in fertilizer exports, Ms. Hien said that in 2022, agricultural production in the main countries will grow, leading to a sharp increase in demand for fertilizer. On the one hand, due to the mild weather, farming is more favorable. In addition, countries that focus on food security policies should increasingly promote reserves, they consume a large amount of key agricultural products such as rice, wheat, cereals, soybeans...
In particular, another reason for the increase in selling prices is due to the influence of the war between Russia and Ukraine, increasing gas prices push up fertilizer prices, and the USD exchange rate has also increased sharply since the beginning of the year... Those are the advantages that help the industry. Our country's fertilizer export turnover is more than 1 billion USD with more than 1.6 million tons.
PLANT FOR THE FERTILIZER INDUSTRY IN 2023
Entering 2023, the fertilizer industry is forecasted to continue to face unending hot issues. The price of raw materials has skyrocketed, the gas supply is scarce from Asia to Europe, and input costs have increased at the same time, so there is no way that fertilizer prices can be reduced.
With the Russia-Ukraine conflict continuing, the global economy facing difficulties, and the risk of epidemics remaining, the Ministry of Agriculture and Rural Development forecasts that the fertilizer market will continue to be complicated in the coming time, unpredictable in price and supply. Especially with potassium fertilizers provided by Russia and Belarus, accounting for nearly 50% of the total demand of the world. Meanwhile, with this fertilizer, Vietnam is completely dependent on imported sources.
In a recent analysis, Agriseco Research said that when China opens up its economy, it can restore production output and remove export restrictions.
Many experts predict that this may cause fertilizer prices to continue to cool down in 2023 and affect the export situation of enterprises. Because once China opens its economy, restores production, and lifts export restrictions, it will likely launch a huge amount of goods, including fertilizers of all kinds./
Read more: FERTILIZER INDUSTRY REPORT
FERTILIZER INDUSTRY REPORT - DECEMBER 2022
Vietnam Macro and Industry Report - December 2022