HCM CITY — Viet Nam expects to rely less on imported fertiliser in the near future as production capacity at local fertiliser plants has increased, according to a source from the Ministry of Agriculture and Rural Development.
The amount of fertiliser imports fell significantly in the first quarter of the year to 678,000 tonnes (US$238 million), down by 20.3 per cent in quantity and 7.8 per cent in value.
The ministry said this year that demand should exceed 9.8 million tonnes, while combined production capacity would reach 7.25 million tonnes.
Many new fertiliser mills are scheduled to be put into operation this year.
This year Viet Nam will import 2.5 million tonnes of fertiliser, or 60 per cent of last year's imports.
The Fertiliser Association of Viet Nam (FAV) said two new fertiliser plants were expected to open this year.
This would raise the country's urea-fertiliser production capacity to twice that of last year's figure of 2.36 million tonnes.
The plants include the 800,000-tonne Ca Mau Nitrogenous Fertiliser Plant under the Viet Nam Oil and Gas Group, and the 560,000-tonne Ninh Binh Fertiliser Plant under the Viet Nam National Chemical Group.
With additional urea production capacity, an excess of 500,000 tonnes of urea fertiliser might occur because the domestic market's current urea demand is less than 2 million tonnes, according to the FAV.
At this time, supplies of most kinds of fertiliser on the domestic market are plentiful, while sales have dropped sharply because many provinces in the Cuu Long (Mekong) Delta have begun to harvest the winter-spring rice crop.
Because Viet Nam has no plants that can produce ammonium sulphate (SA) and Kali fertilisers, it must import these products. However, the fertiliser association said the country has the capability to produce ammonia liquor for SA fertiliser in the future.
FAV General Secretary Nguyen Dinh Hac Thuy said that Viet Nam would likely start exporting urea fertiliser by the end of this year.
Exports would increase in 2015 when the country's urea production capacity is expected to exceed 3 million tonnes.
Domestic urea-fertiliser producers are seeking opportunities to export their products, particularly to the African market. However, Africa is a high-risk market because banks there do not offer services to ensure payments to foreign companies.
If the Vietnamese government would sign a payment protection insurance agreement with African governments, this would create conditions for fertiliser companies to promote their exports there, according to Thuy.
Industry insiders said that to ensure business success in overseas markets, domestic fertiliser producers should pay attention to improving their product quality, reducing production costs and building brand names for their products.
They also said that companies should work together more closely to help them to compete with major exporters from mainland China, Thailand, Russia and countries in the Middle East — VNS