The Vietnam National Chemical Corp (Vinachem) has proposed keeping coal prices unchanged until the end of 2008 and waned that the coal price increase will bring about a spiral of new price increases.
Vinachem said that it is not the right time to raise coal prices. Its member companies, which produce fertilizer and have been facing a lot of difficulties due to the global financial crisis, will suffer more heavily if the price is raised.
Meanwhile, in order to implement the Government’s instructions on stabilizing the fertilizer market and curbing inflation, the corporation asked its member companies not to raise the sale prices from what they were in March 2008.
Currently, all of the world’s oil and material prices have been decreasing, including fertilizer, while the demand for fertilizer has also been decreasing, which has led to producers having large stocks of fertilizer left.
Statistics show that in the first 10 months of 2008, the fertilizer consumption volume was only 75-80 per cent of the consumption during same period of last year.
Vinachem said that if the coal prices increase, as designed by the Vietnam Coal and Mineral Industries Group, the production cost of nitrogenous fertilizer would increase by VND 2.8 million/ton, while phosphate would increase by VND 240,000/ton.
Vinachem said that it would be more reasonable to keep the coal price unchanged until the end of 2008, and the price should only be adjusted beginning in 2009, with quarterly increases of 10-20 per cent each time.
Dr Vu Dinh Anh, deputy head of the Ministry of Finance’s Institute for Market and Price Research, said that it is necessary to consider the price increases, warning that the coal price increases may cause new price increases of many other commodities. (VietNamNet, Vietnam & World Economy)
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