Falling selling prices and rising costs have caused the profits of most fertiliser businesses to plunge, after recording high profits in the previous few years.
Gas and petrol prices greatly affect the production cost of fertiliser because gas prices account for about 80-90 per cent of the production cost of ammonia - an important input for urea and DAP fertilisers.
Fertiliser companies reported profit up by 5-10 times in the first quarter of this year compared to the same period in 2021, mainly thanks to the strong increase in average selling prices.
Fertiliser prices are expected to increase this year so the Ministry of Agriculture and Rural Development must have solutions to stabilise the domestic fertiliser market.
As prices of fertilisers keep soaring to the all-time high and showing no signs of cooling down, World Bank expected that the uptrend will continue next year.
Fertiliser prices in the Mekong Delta have been increasing from the beginning of this year and are forecast to jump further in the remaining months due to the price of imported raw materials and difficulties in transport due to the COVID-19 pandemic.
Phung Ha, Vice President and General Secretary of the Vietnam Fertiliser Association, talks about the reasons of high fertiliser prices and solutions to stabilise the market towards the end of this year.
Amid soaring fertiliser prices compared to early this year, the Ministry of Agriculture and Rural Development proposed the Ministry of Industry and Trade to plan a comprehensive inspection on fertiliser production, business, import and export activities in southern provinces.