Highest decrease of VND 1 million per ton

In the past year, fertilizer prices in the domestic market increased chaotically following the increase in world fertilizer prices and remained at a high level at Lunar New Year. However, according to Vinacam Group, fertilizer prices are expected to decrease gradually in the coming time.

Since February 8, fertilizer companies and agents have reopened for sale, but there are almost no significant transactions. Fertilizer prices also began to fall. Compared to before Lunar New Year, fertilizer price has decreased from VND 500,000 - 1 million per ton.

The decrease in all fertilizer product prices is due to many reasons. First of all, in the short time of 2021, domestic fertilizer prices have increased too quickly according to the world's increase, causing fertilizer in stock of dealers to have many different prices, with significant gaps.

For example, traders offer potash fertilizer in Vietnam in early February with a wide margin. Potash fertilizers in stock have many different costs from importers, traders, and agents.

Thus, the fertilizer prices at this time have decreased by VND millions per ton, but traders still have a profit of several VND million. Fertilizer traders will likely sell goods in stock to take profits.

The main reason for the decline in domestic fertilizer prices is probably the adjustment of Urea fertilizer prices in the world market. In the past month, the world Urea price has decreased by US$ 300-400 per ton. This is most clearly reflected in the recent auction results of India's 1.5 million tons of Urea fertilizer.

The auction of India has caused the world's Urea fertilizer price down, in which the cost of opaque Urea fertilizer in Southeast Asia has also reflected the new price. If importing Urea fertilizer from India to Vietnam for about VND 14.5 - 15 million per ton, traders will still profit because the current domestic selling price is VND 16.5 million per ton.

Fertilizer prices in the first quarter of 2022

The world prices of DAP and potassium fertilizers are still high and show no signs of decreasing. On the contrary, they are increasing slightly due to China's restricting DAP exports.

Besides, India's import demand is up to 4 million tons in the coming time, improving world agricultural product prices.

Compared to the current world price of DAP, if imported to Vietnam, after fully calculating import tax and trade remedy tax according to existing policies, the average cost is still at a high level of over VND 23 million per ton.

As for potash fertilizer price, there seems to be no discount from Israeli, Russian, and Canadian suppliers in Belarus' supply situation being disrupted.

It isn't easy to make an exact prediction for the price of Urea fertilizer in the main consuming markets. In Vietnam, the prices will decrease simultaneously starting next March. Besides, the sharp increase in gasoline prices will also cause an increase in transportation prices worldwide. Therefore, it is forecast that Urea fertilizer price will slow down and increase slightly soon. However, according to Vinacam Group, the domestic Urea price will hardly increase but adjust to the downward direction.

Because the domestic supply is almost exhausted, the price of DAP fertilizer will be stable and tend to increase until China's fertilizer exports are to the regular back.

According to Agromonitor, DAP fertilizer exports from China to Vietnam have been continuously maintained at a low level since November last year until now.

Prices of powdered potassium fertilizers and imported 16-16-8 NPK products will remain current due to abundant inventories. But potassium flakes will continue to increase in March 2022 to the expected level of VND 17-18 million per ton because the import price has reached US$ 750 per ton and the scarce of goods in stock.

When Urea prices increase, other fertilizer prices will increase and vice versa. However, this year's market does not seem to follow this rule, especially DAP and Potassium fertilizers are showing signs of rising while Urea prices tend to decrease.

Following the upward trend of fertilizer prices, the business results of fertilizer enterprises recorded positive results in 2021. Still, profits are forecasted to decrease when fertilizer prices are likely to drop in 2022. In which urea fertilizer production companies will be the most affected.

Translated by Ha Phuc