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BUSINESS REPORT

Do no harm

Deputy Chairman and General Secretary of the Vietnam
Fertilizer Association, Dr. Phung Ha, tells VET’s Chu Khoi
about the fertilizer industry and its export performance
and green transition.

INTERVIEW

% What is the current status of fertilizer duction by major manufacturers such as per cent, respectively, and Malaysia, with
production and consumption in Viet- the Lam Thao Fertilizers and Chemicals 6.3 per cent and 5.2 per cent.
nam? JSC, the Southern Fertilizer JSC, the Duc In the current context, appropriate sup-
Existing demand for fertilizer in the Giang Chemicals Group, and Lao Cai port policies are needed to boost fertilizer
country reaches approximately 11 million Superphosphate Apromaco Ltd is around exports to help companies operate effectively.
tons a year, while the industrial production 1.5-1.6 million tons annually. The pro- However, domestic fertilizer companies are
of fertilizers stands at about 8 million duction of fused phosphate fertilizers from subject to an export tariff of 5 per cent,
tons a year. There is therefore an imbal- the Van Dien, Ninh Binh, and Lao Cai making it difficult to compete with similar
ance between production and consump- phosphate fertilizer joint stock companies, products from other countries. Exports of
tion. In particular, there is an oversupply meanwhile, is estimated at over 600,000 urea fertilizers have experienced fierce com-
of urea and potash but a shortage of other tons a year. This results in an oversupply petition from regional countries such as
fertilizers such as potassium, micronu- of 1-1.1 million tons annually. Indonesia, Malaysia, and Brunei, which do
trient fertilizers, and organic fertilizers. not impose a 5 per cent export tariff.
As a result, Vietnam must import about % Are exports considered a solution to In late 2023, the Vietnam Fertilizer
40 per cent of its DAP fertilizer needs address the oversupply of urea and Association proposed that the Ministry of
and all potassium fertilizer. superphosphate fertilizers? Finance remove this export tariff on certain
The demand for urea in domestic Urea and superphosphate fertilizer types of fertilizers, such as urea and super-
agricultural production is only about manufacturers have adopted many meas- phosphate. The proposal was part of the
1.6-1.8 million tons a year. However, the ures to expand their export markets to Association’s recommendations on a draft
combined capacity of the four domestic boost consumption and ensure production decree amending and supplementing
fertilizer plants - the Ca Mau and Phu and trade efficiency. Figures from the Decree No. 26/2023/ND-CP on Preferential
My Fertilizer Plants under the Petro- General Department of Vietnam Customs Export Tariffs and Import Tariffs.
Vietnam Corporation and the Ninh Binh showed that the country imported nearly We expect the State will reconsider
and Ha Bac Fertilizer Plants under the 4.12 million tons of fertilizers in 2023, preferential tax policies to promote urea
Vietnam National Chemical Group - is worth $1.41 billion. Meanwhile, fertilizer exports and create fair competition
approximately 3 million tons. At this exports stood at nearly 1.55 million tons, between domestic fertilizer manufacturers
point, the domestic supply of urea far worth $648.9 million. In the first two and importers.
exceeds demand. months of 2024, fertilizer exports rose 35
The situation is the same for potash. per cent in volume and 22 per cent in % Is the fertilizer industry experiencing
According to the Vietnam Fertilizer Asso- value year-on-year. any other pressure?
ciation, the demand for superphosphate Vietnam mainly exports fertilizers to The greatest pressure on the fertilizer
for direct use is estimated at about 500,000 Cambodia, which accounted for 38 per industry is green transformation and
tons a year and for NPK fertilizer an esti- cent of the country’s total export volume greenhouse gas emission reductions.
mated 600,000 tons a year. Meanwhile, and value in 2023. It was followed by Agriculture is the second-highest gen-
the total capacity of superphosphate pro- South Korea, with 5.8 per cent and 5.4 erator of greenhouse gases, after the

32 Vietnam Economic Times May 15, 2024 en.vneconomy.vn