Many businesses report big profits, what will happen to Vietnam’s fertilizer exports in the third quarter of 2023?

Source: markettimes.vn

In the third quarter of 2023, many fertilizer businesses announced profits many times higher than the same period last year. These include Lam Thao Super Phosphate and Chemical Joint Stock Company, Southern Fertilizer Joint Stock Company, Southeast Petroleum Fertilizer and Chemical Company, and Binh Dien Fertilizer. This is thanks to increased fertilizer consumption and flourishing exports.

According to statistics from the General Department of Customs, in the third quarter of 2023, the country exported 390,850 tons of fertilizers of all kinds, equivalent to 239.45 million USD, average price 403.4 USD/ton, an increase of 0.08%. in volume, down 35.3% in turnover and down 34.6% in price compared to the third quarter of 2022.

The output of exported fertilizers of all kinds has grown again compared to the same period last year since July. Specifically, fertilizer exports reached 141,006 tons in July, equivalent to 54.6 million USD, an increase of 26% in terms of quantity and decreased 27% in value compared to the same period last year. Through August, fertilizer exports continued to increase to 158,088 tons, equivalent to nearly 59 million USD, up 34% in volume and down 16.5% in value compared to August 2022. Export prices in these two months decreased slightly.

In September, fertilizer exports reached 91,756 tons, equivalent to 41.3 million USD. Output and turnover both decreased compared to last month, but export prices this month reached 450 USD/ton, up 21% compared to August. Prices increased again due to a new decision from China.

Besides, in the domestic market, fertilizer businesses are benefiting as the demand for agricultural production increases and farmers in many places have a good rice harvest; Rice is exported with high output and price. By the end of the third quarter, rice exports reached 3.66 billion USD, an increase of 40.4%, export rice prices reached 553 USD/ton, an increase of 14% over the same period last year. Notably, there was a time when rice prices Exports reached nearly 650 USD/ton, the highest in the world.

Fertilizer prices in the past 2 months have also increased both in the domestic and world markets.

Investing data shows that, after the first half of 2023 declining and remaining at a low level, urea prices began to recover. To date, urea futures contracts have reached over 400 USD/ton, recovering more than 40% compared to the lowest point in mid-June 2023 and the highest level since the end of January 2023, but still lower. 37% more than the same period in 2022.

Since early September, according to Bloomberg sources, a number of large Chinese fertilizer manufacturers have stopped signing new export contracts since the beginning of this month at the request of the Government and this restriction only applies to urea stool.

This has had a significant impact on the global fertilizer market, because China is the world’s leading producer and consumer of urea, so imposing a restriction on urea exports could create a risk of tightening. supply and push up fertilizer prices. China’s largest fertilizer export markets are India, Korea, Myanmar, Australia.

Besides China, another country in the top fertilizer exports is Morocco, where the strongest earthquake of the century occurred on September 8, which will affect the world fertilizer supply in the short term. Morocco owns 70% of the world’s phosphorus rock output, and has advantages in fertilizer and phosphate production.

The above events have pushed urea prices in the world fertilizer market to continue to increase, after a sharp increase due to factors such as escalating tensions in the Black Sea and a sudden increase in urea demand from India (due to domestic output decreased and rice growing area increased), Egypt cut 30% of gas for fertilizer production (last year, Egypt accounted for 4% of production output and 8% of global urea exports) .

According to Rong Viet Securities Joint Stock Company, world urea prices may increase in the last months of 2023 and Vietnam’s domestic market will also move in the same phase. In addition, in Vietnam, urea production output in the last 6 months of the year is usually 5-12% higher than the first half of the year, mainly serving the Winter-Spring crop.

It is expected that consumption demand will increase in the coming months along with recovering fertilizer prices, and the business results of fertilizer businesses in the last quarter of 2023 will improve.