1. Fertilizers in Vietnam Tran Toan Thang Central Institute for Economic Management (CIEM) 68 Phan Dinh Phung, Hanoi, Vietnam

2. Pop=around 90 millions ; Transition, SOE domination; Reliance (70%) on cropping; Small cultivable land; Economic reform started from the reform in agriculture, 1975, 1986, 200 5; Rice production, 3.8 tons/ha (1990) to 5.53 tons/ha (2011) Critical change in fertilizers. Background 3. Fertilizer: Four issues 1. Fertilizer uses and efficiency 2. Market Structure & Supply-side issues, 3. The Pricing Environment, and 4. Cross Border Trade Issues 4. 1. Fertilizer use and efficiency 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 1990 1995 2000 2005 2010 6.5 7.3 8.4 8.4 8.6 1.6 1.9 2.1 2.4 2.6 0.7 0.9 1.5 1.6 2.0 0.3 0.3 0.6 0.8 0.8 Fruit Industrial crop Other_anual Grain 0 1 2 3 4 5 6 7 8 9 0 500 1000 1500 2000 2500 3000 3500 1970 1980 1990 2000 2010 2011 2012 Fertilizer Use ('000 tons nutrient) Rice (ton/ha) Maize (ton/ha) Coffee (ton/ha) Tea yield 5. 1. Fertilizer use and efficiency (cont.) 0 2000 4000 6000 8000 10000 12000 2005 2006 2007 2008 2009 2010 2011 2012 est. 2013 (for.) Kali SA Phosphate DAP NPK Ure Fertilizer use by products (thousand tons) Sources: MARD report, 2 012 Item 2006 2008 2010 North Center South North Center South North Center South Urea 209 184 183 223 189 168 209 198 162 SSP 362 214 111 431 216 127 400 207 137 Potash 113 92 81 116 96 78 119 86 83 NPK 367 212 165 441 188 151 514 245 193 Fertilizer use for rice (kg/ha) 6. 1. Fertilizer use and efficiency (cont.) 1. Remarkable change in intensity over 20 years, though recently slowdown 2. More balanced use 3. Substantial different use of fertilizer by regions because of - Regional agro-ecology -Farm size 7. 2. Market Structure & Supply-side issues 1. Established companies Before 1975 1976-2000 2001-now 8. 2. Market Structure & Supply-side issues 2. Supply structure Photphat 1.825 mil.tons 4 SOE=100% Urea 2.2 mil.tons 4 SOEs=95% NPK 3.8 mil.tons SOEs=46% Private+FDI =45% DAP 0.95 mil.tons 1 SOE=35% SA 0.85 mil.tons Potash 0.95 mil.tons 100 % 100 % 65 % 9%4-5% 9% 9. 3. Pricing 1. Mixing between gov. controll and free market price Before 1990 fertilizers prices were controlled by the gov. rather cheap and planning distribution Since 1990s, stabilization program, due to the gov intends to support farmers. The Gov. stabilized the price by using reserved stock (up to 10% for some times) and stored by some selected SOEs. Using the stab. stock only when there is remarkable price changes Since 2013, only urea and NPK is in the list of stabilized products 10. 3. Pricing 2. Price registration: fert. compalies has to registere their output prices to MOF. This policy is less effective. 3.Subsidized through input cost, decreasing recently. Farmers do not get the subsidy, because the price is more or less similar imported price, even higher for some cases 4. Price adhere to the international price 0.0 100.0 200.0 300.0 400.0 500.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Import Price of Urea World Price of Urea 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1000.0 Price of Imported DAP Fertilizer World DAP Fertilizer Price 11. 4. Conclusive remarks 1. Evidence of fertilizer over used. 2. Quick expansion of production capacity 3. Pricing is mixed and complicated 4. Subsidy is not to the targeted group and reaped by the producer 5. Import relied on China market 6. Export to Campodia, and FDI outflow 12. Thank you!