Vietnam Considers Suspending Fertilizer Exports To Calm Market Prices

Vietnam Customs Online reported on March 30 that global fertilizer prices have hit a record high due to the Russian-Ukrainian conflict, which has driven up domestic fertilizer prices in Vietnam. In this context, many suggested that Vietnam should consider suspending fertilizer exports to reduce the pressure of rising prices in the domestic market. 

 

Immediately after the outbreak of the Russian-Ukrainian conflict, urea prices in the Vietnamese market rose by 25%, and in the first half of March, domestic fertilizer prices in Vietnam rose by 300-700 VND/kg depending on the type, which was the third price increase since the beginning of the year. 

 

In the first 2 months of this year, Vietnam's fertilizer exports to most markets increased significantly year-on-year. Cambodia still ranked first in Vietnam's fertilizer exports, with Vietnam's total exports to this market reaching 53,133 tons, down 12.4% year-on-year and accounting for 15%; exports exceeded US$25.55 million, up 35.5% and accounting for 10.6%. 

 

After Cambodia, Vietnam's second and third largest fertilizer export markets in the first two months of this year were South Korea and Myanmar, with exports to these two markets increasing by 435.9% and 1071% year-on-year respectively. 

 

Vietnam Fertilizer Association Vice President and Secretary General Phung Ho said that the domestic fertilizer prices in Vietnam rose sharply mainly due to the global fertilizer market. Among them, the rise in oil prices led to an increase in the price of raw materials for fertilizer production. 

 

It is worth noting that Russia and China, two countries with large global fertilizer exports, have decided to limit fertilizer exports to prevent shortages in the domestic market and lead to price increases. Specifically, China has imposed export controls on 29 types of fertilizers as of October 15, 2021. Meanwhile, on November 17, 2021, Russia restricted exports of nitrogen fertilizers and nitrogen-containing synthetic fertilizers for six months in an attempt to curb the momentum of rising fertilizer prices due to soaring natural gas prices. 

 

While domestic fertilizer prices are rising, Vietnam continues to export large quantities of fertilizer. According to statistics from the General Department of Vietnam Customs, Vietnam exported more than 1.35 million tons of fertilizers in 2021, up 16.4% year-on-year; the export value was US$559.35 million, up 64.2% year-on-year. In the first 2 months of this year, Vietnam's fertilizer exports reached 352,672,000 tons, up 69.9% year-on-year; exports amounted to nearly 241.68 million USD, up 280.6% year-on-year. The average export price reached US$685.3 per ton, up 124% year-on-year.