High exports but challenges ahead for fertiliser industry

HÀ NỘI — Vietnamese fertiliser exports were riding high in  二0 二 二 with an aggregate volume of  一. 七 million tonnes, bringing in over US$ 一 billion.

As organic agriculture has begun to gain traction in the world, organic fertiliser exports reached  二. 九 一 million tonnes last year, up  一 四 per cent year-by-year. The number of organic fertiliser factories hit  四 六 八, four times as high as the number in  二0 一 七.

However, high exports are only part of the story. In fact, Việt Nam imported  三. 四 四 million tonnes of fertilisers last year as some types of fertilisers could not be produced domestically. Of the imports, 0. 四 六 million tonnes are organic and  三 million tonnes are non-organic. 

The Ministry of Agriculture and Rural Development revealed that there were  七 九 二 fertiliser factories in the country in  二0 二 二,  一 一 二 factories lower than the figure in  二0 二 一. 

The ministry remarked that the mounting prices of fertilisers in  二0 二 二 were pushing up agricultural costs, driving many farmers into unprofitability. 

Specifically, fertiliser costs increased from around  二 五 per cent of their total costs to roughly  五0 per cent, surpassing the rise in their revenues. Substandard fertilisers added to their woes by causing damage to their crops. 

As such, the Vietnam Fertiliser Association (VFA) urged domestic fertiliser producers to invest further in advanced technologies to improve efficiency and cut costs, which would reduce fertiliser prices to the relief of farmers.

"Production should be distributed equally between non-organic and organic fertilisers as the latter has become a trend globally,"大众added Nguyễn Trí Ngọc, VFA deputy director.

The International Fertiliser Association (IFA) had three scenarios for the global fertiliser market in  二0 二 三.

Under the worst-case scenario, global fertiliser demand would fall in  二0 二 三 and stand at  一 九 四. 六 million tonnes in  二0 二 六. Under the midpoint scenario, global demand would reach  二0 一. 一 million tonnes in the next three years. Under the best-case scenario, the figure is adjusted to  二 一 一. 一 million tonnes.

Fertiliser prices, meanwhile, are not likely to drop in  二0 二 三 under all three scenarios. 

Over the past  五0 years, global fertilisers witnessed three booms in prices, one between  一 九 七 三- 一 九 七 四, one between  二00 七- 二00 八, and one from  二0 二 一 until now. 

The recent boom in fertiliser prices was triggered by the balloon in prices of natural gas, which accounts for about over  七0 per cent of fertiliser production costs. Some factories which were unable to transfer higher costs to higher fertiliser prices have been left with no choice but to shut down.

The Russian-Ukrainian conflict fuelled the situation by causing global supply chain disruptions. Specifically, Russia has suspended its fertiliser exports to cater to domestic demand. The suspension will remain in effect until May  二0 二 三. — VNS