DAP fertilizer prices remained high, while other fertilizers, especially urea, tended to decrease slightly or move sideways.
Limited domestic supply of DAP
Faithful to the Zero Covid policy, China’s goods circulation has been greatly affected. This has been slowing down the local economy in China and putting additional pressure on the country’s budget.
Therefore, China has also partially relaxed the campaign and boosted the export of commodities, including fertilizers, to other countries.
In the first 5 months of 2022, China is leading the fertilizer supply market for Vietnam. Specifically, fertilizer imports from China still increased 16% in volume, up 23.7% in turnover, compared with the previous month, at 182,203 tons, equivalent to 78.7 million USD. Compared to May 2021, imports from China decreased by 11% but increased by 34% in turnover. China is still the leading fertilizer supplier to Vietnam, accounting for 45.3% of the total volume and 38.9% of the country’s total fertilizer import turnover.
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| The domestic price of DAP fertilizer has not been able to cool down due to the high price of input materials |
The amount of fertilizer China exports is mainly urea. This also partly explains the reason why urea prices in the world as well as in the country have tended to decrease slightly in the recent 1-2 weeks.
However, the domestic supply of DAP imported from China is still limited, which is the main reason why it is difficult for DAP prices to cool down and keep prices high.
Currently, in the Southwest region, DAP Dinh Vu is fluctuating from 1,100,000 – 1,140,000 VND/bag, and DAP Hong Ha is fluctuating from 1,340,000 – 1,390,000 VND/bag.
Recorded in the market on June 28, fertilizer prices in the Central Highlands: Phu My urea 820,000 – 840,000 VND/bag, Phu My NPK 840,000 VND – 860,000 VND/bag. Binh Dien NPK fertilizer 1,070,000 – 1,090,000 VND/bag. Van Dien phosphate fertilizer 240,000 – 250,000 VND/bag. In the North, Ha Bac urea (Ha Bac fertilizer) is 840,000 – 850,000 VND/bag; Phu My urea is 860,000 – 890,000 VND/bag; Vietnam-Japan NPK fertilizer is 890,000 – 910,000 VND/bag. DAP Dinh Vu 970,000 – 990,000 VND/bag. Phu My Kali 860,000 – 890,000 VND/bag.
Difficult to “cool down” the price of DAP
Currently, there are 2 domestic DAP fertilizer production units, namely DAP Joint Stock Company – Vinachem and DAP Joint Stock Company No. 2 – Vinachem. A representative of DAP Joint Stock Company – Vinachem said: Currently, DAP fertilizer production is still heavily dependent on raw materials, especially imported materials such as sulfur and ammonia. From the beginning of 2022 until now, the price of sulfur imported by the company has increased by more than 85.3% (from 286 USD/ton to 530 USD/ton), equivalent to an increase of 244 USD/ton. Ammonia price increased by 36.8% (from 866 USD/ton to 1,185 USD/ton, equivalent to an increase of 319 USD/ton, from the end of 2020, price of ammonia has tripled.
Besides, coal price also increased by 30.7%, equivalent to 570,000 VND/ton; the price of FO oil for drying raw materials increased by 33.8%; transportation costs increased… The price of selected apatite ore also increased strongly, from VND 1,045,000/ton (May 2021) to VND 1,450,000/ton (April 2022), equivalent to 38.8%. Coal prices may continue to increase from now until the end of the year.
It is because input costs have a strong impact, which has pushed up the price of DAP fertilizer products, putting pressure on the company’s production. With the current price, DAP as well as other large domestic fertilizer manufacturers do not want to increase prices because it will reduce the market, reduce purchasing power and affect the ability to compete with imported goods.
In the long run, if these raw materials do not show signs of decreasing, it is difficult to confirm whether the price of DAP fertilizer can be lowered or not.