After a year of record profits, fertilizer companies saw them plummet last quarter as the prices of urea, potassium, NPK, DAP, and others fell.
Ca Mau Petroleum Fertilizer Joint Stock Company reported profit after tax of VND230 billion (US$9.8 million), a 85% drop year-on-year.
Fertilizer production at Petro Vietnam Ca Mau Fertilizer (PVCFC).
This was because urea, its main fertilizer product accounting for 80% of overall sales, saw prices decline by 40%.
Petrovietnam Fertilizer & Chemicals Corporation said profit fell from VND2.08 trillion to VND260 billion, again because of the fall in urea prices.
Binh Dien Fertilizer suffered a VND40-billion loss as against a profit of VND86 billion in the same period last year.
Habac Nitrogenous Fertilizer & Chemicals JSC lost VND130 billion after earning a profit of VND870 billion a year earlier.
So far this year fertilizers prices have fallen by 30-50%.
Agromonitor, a company that analyzes the agricultural market, said urea prices have dropped to VND10,000 a kilogram, or almost half the price a year ago.
Potassium, NPK and DAP prices have fallen by 30% to VND12,000-15,000.
These are the lowest prices in the last two years.
According to the Fertilizer Association of Vietnam, since the end of 2022 petrol and gas prices have not increased, and many important markets face recession threats, and these have been driving fertilizer prices steadily down.
Gas accounts for 80-90% of the cost of ammonia, an important ingredient in making urea.
China’s recent reopening increased supply, another factor driving prices down.
Vietcombank Securities said dealers are not willing to accept more stocks amid the falling prices, leading to more inventories for producers.
Fertilizer prices are likely to fall even more this year, it said.