Fertilizer prices are expected to drop 40% this year
According to Bao Viet Securities, global fertilizer demand will recover in 2023 after continuously declining in 2021 and 2022. Specifically, IFA forecasts that fertilizer demand will increase this year. 195.8 thousand tons, representing a 1.5% increase from the low in 2022.
In which, global urea demand is expected to increase by about 1.7%, DAP demand will increase by 4-7% year-on-year.
For Urea, S&P Global’s forecast said that Urea fertilizer prices of all kinds will range from 400-430 USD/ton this year, down 38% compared to 2022. This price is also very low compared to the approximate price of 1,000 USD. USD/ton in early 2022.
S&P Global also believes that Urea fertilizer prices will likely continue to be under pressure in the first half of 2023 until there is strong demand from major markets such as India and Brazil entering the season. In addition, Russia imposes a new fertilizer export tax of 23.5% on urea products priced at over $450/ton, effective from January 1, 2023 to December 31, 2023. As a result, Russian Urea exporters will set a low floor price (below $450) in 2023 as the export tax encourages Russian exporters to sell Urea below this price throughout the year. With an estimated average production cost of about $156/tonne Urea (FOB) in 2023, Urea fertilizer prices below $450 remain attractive profits for fertilizer producers in Russia.
Fertilizer export fell in first 5 months of 2023
According to the statistics figures of the General Department of Customs, in the first 5 months of 2023, the whole country exported 692,259 tonnes of fertilizers of all kinds, equivalent to 289.07 million USD, the average price was 417.6 USD/tonne, down by 8.9. % in volume, down by 42.2% in turnover and 36.5% in price over the same period of 2022.
Particularly in May of 2023, 154,995 tonnes of fertilizers of all kinds were exported, reaching 56.9 million USD, priced at 367.1 USD/tonne, up by 17.5% in volume, up by 17.4% in turnover but down slightly by 1% in price compared to April of 2023. In comparison to May of 2022, it increased by 16.9% in volume, but decreased by 35.2% in turnover and decreased by 44.6% in price.
Cambodia was leading the list of the country’s main fertilizer export markets, accounted for 33% of the country's total fertilizer export volume and turnover, reaching 227,708 tonnes, equivalent to 95.47 million USD, the average price was 419.3 USD/tonne, an increase of 8% in volume but a decrease of 19.2% in turnover and a decrease in price of 25.1% over the same period of 2022. In May of 2023, the exports to this market reached 76,236 tonnes, equivalent to 29.92 million USD, the average price was 392.5 USD/tonne, up by 64.7% in volume and 65.4% in turnover, the price increased slightly by 0.4% compared to April of 2023.
Behind Cambodia's main market was the South Korean market with 47,838 tonnes, equivalent to 17.62 million USD, the average price was 368.3 USD/tonne, down by 16.9% in volume, down by 62% in turnover and down by 54.4% in price, accounting for 6.9% of the total volume and 6% of the total fertilizer export turnover of the country.
The exports to the Malaysian market reached 45,552 tonnes, equivalent to 15.23 million USD, the average price was 334.3 USD/tonne, a sharp decrease of 44.3% in volume, 59.8% in turnover and 27.8 % in price, accounting for 6.6% of the total volume and 5.3% of the total turnover.
Meanwhile, the exports to RCEP FTA markets reached 391,107 tonnes, equivalent to 162.64 million USD, down by 16.2% in volume, down by 42.8% in turnover. And the exports to FTA CPTTP markets reached 48,442 tonnes, equivalent to 16.61 million USD, down by 47.9% in volume, down by 63.5% in turnover. The exports to the Southeast Asian market reached 340,379 tonnes, equivalent to 143.63 million USD, down by 14.5% in volume, down by 37.6% in turnover.
Fertiliser enterprises apply modern technology to reduce emissions
Fertiliser manufacturers have implemented solutions to significantly reduce their carbon emission in production and improve energy efficiency.
Phung Ha, general secretary and vice chairman of the Vietnam Fertiliser Association said that global agricultural output would decrease by 50% if no fertilisers were used. However, about 2.5% of total global greenhouse gas emissions are related to fertiliser.
Domestic fertiliser manufacturers have taken many measures to significantly reduce carbon emissions in production.
Energy consumption of ammonia production plants has decreased by more than 15% in the past decade. Several fertiliser companies have implemented greener methods of fertiliser production, including supply of renewable energy sources for the ammonia production process.
Another solution is to develop fertiliser products such as the decomposing, slow-dissolving, and controlled-release fertilisers that will help increase absorption and reduce harm to the environment.
T.Huong
Source: Vitic