Fertilizer market aware of market volatility

China’s temporary suspension of urea exports

Recently, China has asked some fertilizer producers to suspend urea exports, and then some major Chinese fertilizer producers have halted signing new export deals from early this month following a government mandate.

The domestic fertilizer market, especially urea products need to be stabilized - photo: Duyen Nguyen

In the world market, urea prices sharply increased. For example, in Brazil, the product prices skyrocketed to US$380 to 435 per tonne. In Central America, offers soared after the news of China’s export restrictions was released and a surprise bid from India with offering price to the western coast of Mexico and Colombia at US$460 per tonne, up from the previous US$410 per tonne. Furthermore, the increase in world oil prices has also contributed to rising fertilizer prices.

Stabilizing domestic fertilizer market

Developments of Vietnam’s urea market also closely followed the world urea market and prices have shown signs of increase. Specifically, Ca Mau urea price is VND11,200 per kg, higher than that of previous days of VND10,000 per kg. Meanwhile, Phu My urea prices in Ho Chi Minh City and Long An Province reached VND10,400 - 10,600 per kg; Ninh Binh urea at VND9,500 per kg; and Ha Bac urea at VND9,650 per kg.

Dr. Phung Ha - Vice President and General Secretary of the Vietnam Fertilizer Association, said although it is not the peak of the domestic crop, domestic fertilizer prices have increased following the world fertilizer prices and are forecast to keep rising in this year’s winter-spring crop season.

Regarding domestic fertilizer supply, at present, the production capacity of urea at four factories under the Vietnam Oil and Gas Group (Petrovietnam) and Vietnam Chemical Group (Vinachem) has reached 2.5 million tonnes per year while the domestic demand is only from 1.6 to 1.8 million tonnes each year.

A representative of Ca Mau Petroleum Fertilizer Joint Stock Company (PVCFC) said since early August, PVCFC has supplied more than 60,000 tonnes of urea of all kinds to the market, meeting the demand for urea fertilizer for agricultural production. The company has prepared more than 100,000 tonnes of fertilizers of all kinds at warehouses in different regions, ensuring adequate fertilizer supply for farmers across the country in the near future. By mid-August 2023, Dam Ca Mau Factory had produced 615,450 tonnes of fertilizer, including 495,000 tonnes in the first half of this year, meeting the demand of the summer-autumn crop season.

According to a report of Agromonitor Market Research Company, it is expected that in September this year, the total supply of urea will increase thanks to the recovery of domestic production and increase in imports amid declining demand. Therefore, inventory at the end of September this year will exceed 450,000 tonnes. However, due to unpredictable developments in the world urea market in the coming time, Dr. Phung Ha said, although Vietnam does not have any regulations on urea export restrictions, it still needs to consider the export while still ensuring domestic urea supply, and avoid scarcity and an urea price blow up.