Russia-Ukraine conflict forces VN to look for alternative fertiliser suppliers

Russia-Ukraine conflict forces VN to look for alternative fertiliser suppliers

HÀ NỘI — The Russia–Ukraine conflict is forcing Việt Nam to look for alternative suppliers of fertilisers to cope with the shortage of supply and rising prices.

According to the Ministry of Agriculture and Rural Development, the Russia–Ukraine conflict is badly affecting the fertiliser market, which had already been suffering supply shortage and price increase from the prolonged COVID- 一 九 pandemic as the supply chain was disrupted.

Russia was one of the world’s major low-cost fertiliser exporters, ranking first in urea, NPK, among nitrate export, third in potash and fourth in phosphate.

Late last week, Russia’s trade and industry ministry reco妹妹ended that the country’s fertiliser producers temporarily halt exports in a move that threatened to shock the global market.

China, a significant fertiliser exporter, tightened the export of  二 九 types of plant nutrition from mid-October last year to cope with the domestic shortage.

Domestic fertiliser prices set a new high in the past  五0 years. According to the ministry, fertiliser prices rose by more than  二0 per cent in recent months. The soaring prices of oil and gas, which accounted for a significant part of production cost, also pushed up fertiliser prices.

The storm of fertiliser prices was forecast to continue when these export restrictions were still in place, causing a severe shortage of fertilisers, including potash and DAP.

Vinacam Group Joint Stock Company, one of Việt Nam’s leading fertiliser importers, said that quotations of urea at US$ 五 四0- 五 六0 per tonne were all cancelled. Suppliers from Egypt increased quotation prices by $ 一 四0 to $ 七 三0 per tonne.

This meant that in the short term, urea might climb to around $ 八00- 一,000 per tonne in April if the oil price reaches $ 一 五0 per barrel. DAP was forecast to reach $ 九 五0 per tonne in April and hit $ 一, 二00- 一, 五00 soon.

Vinacam predicted that the domestic market would see a severe shortage of DAP in the second quarter, and its price could soar to VNĐ 二 五 million per tonne. Urea could return to the record of VNĐ 一 八 million per tonne set in  二0 二 一.

For potash, Việt Nam relied entirely on imports. Vinacam said that potash price might soon hit VNĐ 一 五- 二0 million per tonne and set a new high of around VNĐ 二 四- 二 五 million.

The skyrocketing prices of fertilisers are pushing farmers into a cost crisis, threatening to push up food prices. Fertilisers accounted for around  四0- 六0 per cent of the input cost of agricultural production. Worse, fertiliser prices soured when the su妹妹er-autumn crop was coming in April and May.

The ministry pointed out that Việt Nam uses around  一0 million tonnes of fertilisers each year. Last year, the country consumed  一0. 七 million tonnes, up by  四. 六 七 per cent over  二0 二0, the ministry pointed out, forecasting the domestic demand for fertilisers was stable this year.

Domestic producers could supply major fertiliser products like phosphate, urea and NPK to meet the domestic demand.

Domestic DAP production could meet around  六0 per cent of demand while potash and SA fertilisers were entirely dependent on imports.

The Plant Protection Department said that it would keep a close watch on the global and domestic fertiliser market to timely raise measures to ensure agricultural production, urging import companies to look for alternative fertiliser suppliers, especially potash.

The agriculture ministry urged the Ministry of Industry and Trade to consider lifting the imposition of trade defence measures on imported DAP and MAP while enhancing market inspections to prevent speculation and fake and low-quality fertiliser.

The agriculture ministry said it was also necessary to review tax policies on fertilisers.

It also said that farmers should increase the application of new farming techniques to reduce chemical fertilisers and replace them with organic fertilisers.

The ministry’s statistics showed that Việt Nam must import around  二. 七- 三. 五 million tonnes of fertilisers each year, of which potash accounted for  二 五- 二 八 per cent and SA  二 五- 三 一 per cent.

The fertiliser import from Russia made up around  一 三0,000- 三 八0,000 tonnes, accounting for  三- 九. 五 per cent of Việt Nam’s fertiliser imports, mainly potash, NPK and DAP.

Last year, Việt Nam imported more than  五. 一 million tonnes,  三 一. 一 per cent of which was SA, and  二 五. 三 per cent was potash. Potash was imported from  三0 markets. Việt Nam imported  三 二0,000 tonnes of fertilisers from Russia in  二0 二 一, mostly potash with  一 九 五,000 tonnes, accounting for more than  一 五 per cent of potash import.

In the first two months of this year, Việt Nam imported more than  七0 六,000 tonnes,  七 三, 八00 tonnes of which came from Russia worth $ 四0 million. Potash import from Russia accounted for  一 八 per cent of the country’s potash import in the period. — VNS