The lack of input materials caused by limited transport capability has caused big difficulties for local fertiliser producers.
The Southern Fertiliser Company said that it had to transport apatite ore from Lao Cai in the north to its plant in Long Thanh district in the southern province of Dong nai. The company first carried apatite ore from Lao Cai to Hai Phong port by train, and then shipped ore from Hai Phong to Long Thanh district by sea.
However, as the transportation fees of both means of transport have increased considerably in the last time, and the transportation capability is limited, the company cannot get enough materials to feed the production line.
Bui Quang Lanh, Director of Van Dien Phosphate Fertiliser Company, said that since January 1, 2007, input material transportation fees had increased by VND30,000/tonne, while the fees for carrying finished products to consumption points had also increased by VND40,000/tonne. At the same time, the prices of many kinds of input material have increased sharply, making the production cost of fertiliser much higher.
Despite the higher transportation fees, companies are still facing difficulties in transporting input materials to their plants or carrying finished products to consumption places due to bad transport capability.
Urea, Kali, SA, DAP, the main input materials for NPK fertiliser, which account for 70-90% of NPK content, all have seen sharp price increases. The price of urea, for example, has risen from VND4,400.kg to VND5,000/kg, kali from VND3,600/kg to VND4,000/kg. It is estimated that the production cost of one tonne of NPK has increased by VND150-300,000.
The Lam Thao Superphosphate and Chemicals Company said that the company put out 650,000 tonnes a year, a half of which must be made right at this time to be provided to farmers for the summer-autumn crop. However, the company is facing big difficulties due to the dramatic increases in prices.
Mr Lanh from Van Dien Phosphate Fertiliser Company said that the company had raised its selling price by VND30,000/tonne for phosphate fertiliser, and VND50-100,000/tonne for NPK, commencing April 1. However, the increases prove to be not enough to cover the input material price increases.
He said that since January 1, 2007, the production cost for one tonne of phosphate fertiliser had increased by VND110,000/tonne, and for NPK by VND150-300,000. However, the company did not raise the selling price in the first quarter of the year, thus ‘giving’ farmers VND8-10bil.
Mr Lanh has announced that phosphate fertiliser will see the price increase of VND30,000/tonne as of May 1, 2007, and another VND40,000/tonne as of June 1, 2007.
Source: VNE
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