Vietnam’s fertilizer producers are facing serious pressure after the Vietnam National Coal and Mineral Industries Group (Vinacomin/TKV) repeatedly increased coal prices — a key input in fertilizer production — by more than 54%since the beginning of 2022.
Coal Prices Rise Sharply, Fertilizer Producers Sound Alarm
In an official letter sent to TKV, Van Dien Fused Magnesium Phosphate Fertilizer JSC, a subsidiary of the Vietnam National Chemical Group (Vinachem), warned that the rapid rise in coal prices is pushing production costs to unsustainable levels.
The company noted that the COVID-19 pandemic and the Russia–Ukraine conflict have disrupted global commodity markets, with fertilizers among the hardest hit. Production materials and logistics costs have soared, while farmers’ purchasing power remains weak due to stagnant agricultural prices.
Coal alone accounts for around 50% of total input costs in producing fused phosphate fertilizers. Therefore, TKV’s decision to raise coal prices by 54.51% compared to early 2022 has become a major shock for the fertilizer industry.
“This is the primary and most significant factor forcing us to raise our product prices, directly affecting production and farmers’ livelihoods,” Van Dien stated.
Multiple Coal Price Hikes in Just Three Months
According to Van Dien’s report, TKV raised coal prices three times between March and June 2022:
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March 18, 2022: VND 3,512,080/ton (excluding VAT), up 13.94% from January 2022.
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April 27, 2022: VND 4,169,500/ton, up 21.33%.
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June 8, 2022: VND 4,762,730/ton, up 19.24%.
In total, coal prices increased by more than 54% since the start of the year.
Van Dien urged TKV to reconsider both the magnitude and frequency of its price hikes, suggesting an approach based on “shared benefits and mutual hardship” to give producers and farmers “breathing space” to recover and stabilize production.
Other Producers Also Voice Concerns
Similarly, Ninh Binh Phosphate Fertilizer JSC issued a complaint, calling TKV’s increases “too steep and too frequent.”
As of June 8, 2022, TKV’s coal prices were up 56% from early 2022. Ninh Binh Fertilizer noted that such sharp adjustments have placed immense strain on companies that are already trying to reduce prices and support farmers amid weak market demand.
So far, TKV has not officially responded to the fertilizer industry’s requests for price stabilization or adjustment.