Market and product

The domestic fertilizer market remains unstable for various reasons, including large amount of intermediary fertilizer distributors, as well as counterfeit fertilizers.

According to the Fertilizer Association of Vietnam (FAV), prices of all types of fertilizers have risen sharply this year. DAP, for example, costs US$120 per ton, an increase of between 11-15 percent from last year; Urea is at US$25 per ton representing an increase of between 21-23 percent. Ammonia is priced at US$125 per ton, and sulfur US$120 per ton.

The hike in fertilizer prices globally is due to limited supplies in the US, North Africa and Russia, along with increasing demands in India (30 percent), the US (20-25 percent) and Pakistan (12-15 percent).

Vietnam's fertilizer production has been relatively sufficient for domestic use, with prices being kept reasonably stable. Statistics from the Department of Crop Production, under the Ministry of Agriculture and Rural Development showed that during the first three quarters, Vietnam produced 4.33 million tons of fertilizer. This is a 5.8 percent increase of from last year. Urea remained stable at 716,200 tonnes, the same quantity as produced the year before. NPK production grew to 2.13 million tons, a 3.3 percent increase from 2010, and 1.19 million tons of DAP production shows a 11.5 percent increase.

"As of now, there are more than 300 state and privately-owned fertilizer production companies nationwide. Some of them are well-known, such as Binh Dien Fertilizer Joint Stock Company, Five-star International Group, the Southern Fertilizers Company, Phu My Fertilizer and Petroleum Chemicals Joint Stock Company, Ha Bac Nitrogen Fertilizers and Chemicals Company, Thien Sinh Joint Stock Company, and Song Gianh Fertilizer Company," said Phung Ha, Director of the Department of Chemicals, under the Ministry of Industry and Trade.

The results of increased production shows positive growth in the high-quality fertilizer industry. However there remains a certain instability as well, which is revealed when farmers face scarcity and high prices in the market.

"The unstableness in local provision of fertilizers is due to a malfunctioning fertilizer distribution network," insisted Price Management Director under the Ministry of Finance Nguyen Tien Thoa.

Only a few of fertilizer production enterprises have expanded their own distribution network within the reach of farmers while the remaining enterprises have not. The paradox has it that domestic produced fertilizers cost less than the imported but have been sold on the market at the same prices which poses a major question for related authorities.

"Counterfeit fertilizers have shown up on the market, which puts confuses farmers about which types to buy. Discriminating between fake and genuine products may not be easy for them. Each year task forces discover around 300 cases of fraud in the industry. Most violations are related to quality, expiration dates, brand names, and prices.

"Quality fraud has turned out to be the most common violation, especially with NPK. This fertilizer is widely used and easy to fake. Small-scale fertilizer production facilities have often been found to falsely produce and trade counterfeit fertilizers," said Market Management Deputy Director Vo Van Quyen.

At a recent workshop held in Ho Chi Minh City to discuss the best way to regulate fertilizer production and trade, fertilizer enterprises and relevant authorities gave suggestions about the issue.

One thing they agreed about is that there should be a single, nationwide fertilizer distribution network established in order to in order to ensure an adequate and reliable supply of the product to farmers at reasonable prices. This network would include fertilizer chain stores already in existence.

In order to achieve this goal to match supply and demand, the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development and FAV must work together to provide proper regulation for the domestic fertilizer market in order to keep it up to international standards, and meet future demand. Businesses dealing in this trade would be requested to supply areas in the most demand, and price their products according to the collective need.

Also, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development would need to design and enforce regulations on fertilizer production and trade. The media would also play a role in that they would have to expose any violations in the industry./.