Fertiliser prices forecast to continue growth this year

In Việt Nam, the prices of domestically produced and imported fertiliser products at the end of 2021 rose by 80-150 per cent compared to the beginning of the year. Photo diendandoanhnghiep.vn

Fertiliser prices are expected to increase this year so the Ministry of Agriculture and Rural Development must have solutions to stabilise the domestic fertiliser market.

In the latest report, Bản Việt Securities Joint Stock Company (VCSC) has forecast that the average global urea price would reach US$625 per tonne in 2022, up 25 per cent compared to 2021.

The VCSC reported that some urea plants in the world had closed due to high gas prices and labour costs, creating a global fertiliser shortage.

In addition, the urea supply has been disrupted due to COVID-19, seeing prices rise further.

At the end of 2021, China and Russia, two of the three largest fertiliser export countries in the world, decided to suspend fertiliser exports to stabilise domestic supply and control inflation. This decision could last until the end of the second quarter of 2022.

That is one factor to push the fertiliser prices up further on the global market this year due to lower supply.

The sudden increase in fertiliser prices in 2021 was due to the higher price of raw materials for production, including a strong increase in the price of sulfur, the main materials for fertiliser production from $95 per cent to $221. Another factor was the freight rate increasing by three to five times, causing a surge in production cost.

The fertiliser prices on the domestic market increased in 2021 along with the world's fertiliser price surge. In Việt Nam, the prices of domestically produced and imported fertiliser products at the end of 2021 rose by 80-150 per cent compared to the beginning of the same year.

In December 2021, the prices of some fertilisers increased sharply compared to the same period in 2020. Specifically, the price surged from VNĐ8 million per tonne of urea fertiliser in 2020 to VNĐ18 million in 2021; from VNĐ8.2 million per tonne of potassium fertiliser to VNĐ14 million; from VNĐ5.4 million per tonne of NPK fertiliser to VNĐ14 million; and from VNĐ3.4 million per tonne of phosphate fertiliser to VNĐ5 million.

Meanwhile, there is still wasteful use of fertilisers. This has increased production costs, reduced competitiveness of agricultural produce and polluted the environment.

The Minister of Agriculture and Rural Development Lê Minh Hoan has requested the departments of agriculture and rural developments of localities to have guidance on using fertiliser efficiently. They should also encourage farmers to use organic fertilisers.

The ministry will strengthen the inspection for the fertiliser production, trading and quality management. It would also support farmers in using organic fertilisers.

The ministry has asked fertiliser trading enterprises to implement commitments and plans on fertiliser production.

The enterprises also requested an increase in the application of technology in production to create high-quality and friendly environmental fertilisers. — VNS