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Vietnam spends US$338 million on fertilizer imports in Q1 2017

Vietnam’s fertilizer imports soared in the first quarter of 2017 after a sharp decrease in 2016, reaching 1.22 million tons worth US$338 million, up 31.5% in volume and nearly 24% in value over the same period last year, said the Ministry of Agriculture and Rural Development (MARD).

Notably, January-March urea fertilizer imports amounted to 231,000 tons, double in volume over the same period last year.

China remained the largest fertilizer exporter to Vietnam, accounting for nearly 42% of Vietnam’s fertilizer import value.

One of the reasons for the sharp rise of fertilizer imports, especially from China, is that the Chinese yuan has recently weakened against the U.S. dollar, making Chinese fertilizer cheaper than domestic one.

In addition, two of the four urea production plants of the Vietnam Chemical Corporation (Vinachem) use coal as their feedstock. As the coal price has risen, production cost has edged higher as a result, leading to higher fertilizer prices and lower competitiveness.

In mid-March, the price of imported fertilizer through Haiphong was recorded at US$237 per ton, 14-18% lower than that of domestic fertilizer.

According to the Ministry of Industry and Trade (MOIT), each year Vietnam needs about 11 million tons of fertilizer and 90% of it is inorganic fertilizer. However, domestic production still does not meet the demand of domestic consumption.

Concerned over the overwhelming majority of imported fertilizer on the domestic market, some local fertilizer producers and traders have requested the Vietnam Competition Authority under MOIT to take safeguard measures against some imported fertilizer products.

The request is in accordance with the WTO’s regulations. However, some enterprises said safeguard measures against fertilizer imports will adversely impact farmers.

Most fertilizer used in Vietnam is for rice cultivation. If the fertilizer price edges up, rice prices would also increase, spelling trouble for rice exporters.

MARD is seeking comment on a draft decree on fertilizer management. According to MARD, the draft decree will attach responsibilities for fertilizer management to local authorities. At present, MOIT manages inorganic fertilizer while MARD is responsible for organic fertilizer management.

Source: Saigon Times