VietNamNet Bridge – Domestic fertilizer producers and farmers both have shouted for help. However, the solutions expected would be able to save one of the two.

Domestic fertilizer manufacturers have called on to impose import tariffs in order to reduce the inventories and help to boost sales. However, analysts have warned that the import tariff would put a heavy burden on farmers.

The tariff, manufacturers and farmers

According to Do Duy Phi, former Chair of the Fertilizer Association of Vietnam (FAV), the four operational fertilizer plants in Vietnam, including Phu My, Ca Mau, Ninh Binh and Ha Bac can churn out some 2 million tons a year.

Of these, Phu My and Ca Mau each can make out 840,000 tons a year if they run at full capacity. The Ninh Binh plant can make 560,000 tons a year, while Ha Bac 100,000 tons.

Phi affirmed that the fertilizer churned out by the four plants can quite completely satisfy the domestic demand, and the oversupply may happen sometimes.

However, Vietnamese enterprises still keep importing fertilizer every year, thus causing high inventories. A report by FAV showed that Vietnam has 500,000-550,000 tons of nitrate fertilizer a year, while domestically made products leave unsold.

According to the Ministry of Agriculture and Rural Development, Vietnam had imported over 3 million tons of fertilizer of different kinds, including 449,000 tons of nitrate.

Vietnamese enterprises still import nitrate, mostly from China, for domestic consumption, because Chinese products are cheaper than domestic products. Chinese nitrate, for example, is 25,000 dong per 50 kilo pack cheaper than Phu My’s.

The government has been urged to impose import tax on fertilizer imports in order to rescue domestic manufacturers.

“The plants have been running at full capacity, while the urea supply has been profuse. Therefore, in order to protect the local production, the State should think of it (taxing fertilizer imports – reporter),” Phi said on Thoi bao Kinh te Saigon.

No final decision about the taxation has been made, but farmers have been put on tenterhooks after hearing the news.

Nguyen Van Quoc, a farmer in Tan Hoa commune of Tan Thanh district in the southern province of Long An said that once the import tax increase would mean higher agricultural production cost.

“It’s necessary to think carefully before making any decisions relating to the taxation, because this would have big impacts on farmers,” he said.

Nitrate price up slightly

It’s now the high 2012-2013 winter-spring season, when the demand for fertilizer increases sharply, thus leading to the fertilizer price increase.

In Tien Giang and Long An provinces, nitrate has been sold to farmers at the price higher by 5000 dong per 50 kilo pack than the price of one month ago.

In Tien Giang, a first class agent sold to farmers at 485,000 dong per 50 kilo pack of Phu My products on November 27. Meanwhile, Chinese products and Ca Mau plant’s products were sold at 460,000 dong.

Meanwhile, NPK and DAP still see the prices unchanged in comparison with the price of one month ago.

Filipino DAP is now selling at 815,000 dong per pack, Chinese at 700,000 dong, while NPK 16 at 590,000 dong.

Nong nghiep Vietnam has reported fertilizer enterprises have been facing big difficulties, since the Vietnam Coal and Mineral Industries Group (Vinacomin) has refused the proposal to reduce the coal sale prices.

Some months ago, Vinacomin insisted on raising the coal sale prices, reasoning the high export price. However, though the export price has reduced and the export tariff has been cut from 20 percent to 10 percent, Vinacomin does not intend to reduce the coal prices.

Compiled by Thu Uyen