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Fertilizer prices have increased following the appreciation of the US dollar against the Vietnamese dong as well as higher prices on the global market, spurred by high demand in many countries like India.

Le Quoc Phong, director of Binh Dien Fertilizer Company, said there were limited supplies and a shortage of reserves on the global market.

Viet Nam had had to import a large volume of fertilizer every year to satisfy local demand since its local production met only one-third of consumption, Phong said.

A kilo of DAP fertilizer has risen to VND11,200 (US$ 0.57), compared to VND11,000 earlier this month and VND10,600 in August.

Similarly, the price of a kilo of urea fertilizer increased from VND6,200 ($ 0.3) in August to VND6,250 in earlier this month to VND6,350 currently.

China is currently the biggest supplier of fertilizers to Viet Nam, accounting for nearly 45 per cent of the country's total imports, followed by Russia, South Korea and the Philippines.

In April, Chinese authorities raised the fertilizer export tariff from 35 per cent to 135 per cent.

The Vietnamese Government recently issued a circular calling for an increase of the fertilizer import duty from 5 per cent to 6.5 per cent. This pushed up prices of fertilizers, experts have said.

Most farmers are worried about the higher prices, which will add to their production costs.

More than 318,600ha under the autumn-winter rice crop in the Mekong Delta region are in the growing stage, which are in dire need of fertilizers.

To stabilize the fertilizer market and help farmers feel more secure about production, experts have urged the Government to adopt new policies.

Local fertilizer producers should restructure their distribution network and regularly check selling prices to prevent agents from raising prices freely.

Currently, the Government did not have incentive policies for enterprises to import fertilizer to keep in reserve. Fertilizer prices, thus, depended on the fluctuation on the world market, Phong said.

Fertilizer reserves were like a double-edged sword, he added. They worked well when prices increased, but when they dropped, businesses had to sell at market prices and losses were unavoidable.

The Government, he said, should create measures to ensure security for businesses and others who participate in price-stabilization programs. Soft loans and support when prices drop should be included, he said. (PNA/VNS)

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