Mekong Delta's urea fertiliser prices up in line with global trend

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Publish time: 11th May, 2012      Source: www.cnchemicals.com
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May 11, 2012

   

   

Mekong Delta''s urea fertiliser prices up in line with global trend

   

   

   

In line with the world''s trend, urea fertiliser prices in Vietnam''s Mekong Delta are rising every day.

   

   

The global urea fertiliser prices fluctuated around US$490-495 a tonne at the end of March. However, in early May the item marked up US$15-20 per tonne in the world''s market, leading to the surge in local urea fertiliser prices.

   

   

Le Quoc Phong, vice chairman of the Central Fertiliser Association of Vietnam, confirmed this price uptrend, saying that although the Ca Mau urea plant of the Vietnam Oil and Gas Group (PVN) has started service, the local fertiliser supply is still scarce.

   

   

"In the previous years, Dam Phu My fertiliser plant both produced and imported urea fertiliser, but this year it has stopped importing. Meanwhile, local urea fertiliser importers have for long excluded this item from their product portfolios, said Phong.

   

   

Tran Van Hoanh, owner of a fertiliser store named Tan Huy Tan Luc in Long An, said Dam Phu My urea fertiliser price was constantly rising over the last two weeks.

   

   

"Two weeks ago, I sold Dam Phu My urea fertiliser at VND11,200 (US$0.53) per kilogramme. The price then went up to VND11,400 (US$0.54) and VND12,000 (US$0.57) a kilogramme. "I can''t tell whether the price will further surge next week or not," said Hoanh. He explained his store is a level-one sales agent, so he has to adjust prices up one day after the supplier announces price hike.

   

   

Hoang Kim, a rice grower in Tan Hong District, Dong Thap Province, informed urea fertiliser is now sold at VND600,000 (US$28.68) per 50-kilogramme bag there, picking up VND50,000 (US$2.39) a bag from February.

   

   

Hoanh and Kim said that fertiliser sales agents in Long An and Dong Thap mainly sell Dam Phu My urea fertiliser at present and no longer sell the products imported from China and Indonesia.

   

   

According to the Ministry of Agriculture and Rural Development, urea fertiliser price is a reference to know if rice farmers gain profits in a certain crop. In particular, if the price of two kilogrammes of rice sold at the end of the crop is lower than the price of one kilogramme of urea fertiliser, farmers incur losses.

   

   

As such, given the current urea fertiliser price of VND12,000 (US$0.57) per kilogramme, rice prices must be higher than VND6,000 (US$0.29) a kilogramme in the coming summer-winter crop to ensure profits for farmers.

   

   

Since local urea fertiliser producers are enjoying subsidies, the costs to produce one kilogramme of fertiliser are lower than prices of imported products by between 23% and 57% depending on the kind of feedstock, gas or coal, said the Price Management Department under the Ministry of Industry and Trade.

   

   

According to the chemicals agency at the trade ministry, 460,000 tonnes of urea fertiliser was produced in the first four months of 2012.

   

   

Meanwhile, some 938,000 tonnes of fertiliser was imported as of April-end, worth US$401 million, dropping 27.3% in volume and 16.1% in value over the same period last year.