Taking aim at China’s fertiliser dominance

The price of Chinese-manufactured fertiliser has increased significantly in the last few months, with traders blaming a weakening kyat and increasing transportation charges.

Since the beginning of March, the market cost of 1 yuan has gone from K156 to about K180, while transportation costs between the fertiliser factories and the Muse border gate has gone from 70 yuan to 125 yuan per tonne.

Chinese fertiliser is traditionally the cheapest for upper Myanmar to import. Its competition from places like Indonesia and Vietnam is about one-third most expensive, though industry insiders say the gap is now closing.

Most Chinese fertiliser has increased in kyat terms by about 5 to 15 percent over the past three months. A 50 kilogram bag of branded Panfu Pale is now K21,000, where it used to be K18,000, while Thalwin GT climbed from K17,600 to K18,4000 a bag.

Even though prices are rising, this is still cheaper than Indonesian imports at K30,000 a bag and Vietnamese brands at K30,000 to K40,000.

U Myo Aung Thu, an importer of Vietnamese-branded fertiliser, said he must make the case that the products he sells are superior to their Chinese competitors, though the narrowing price difference does make his job easier.

“Farmers need to understand that quality makes a different. Don’t only look at the short term,” he said.

Foreign exporters are pushing for Myanmar market share.

U Myo Aung Thu imports hundreds of tonnes of fertiliser a year by ship from Vietnam, though Chinese competition usually come overland.

Traders estimated about 750 tonnes of fertiliser a day comes through Muse, Myanmar’s main overland trade portal with China. They say market demand is growing significantly, and not only Chinese fertiliser exporters are eyeing opportunities in the country.

Agricultural businesspeople said their companies are importing larger and larger amounts of fertiliser. U Win Htay, managing director of Myanmar Sugar Development Public Company, said his company has imported an Indonesian brand of fertiliser called Haracoat. The firm has also begun importing larger amounts than it needs itself and is selling to other businesses.

“The price is still high, around K30,000 a bag. But it contains the right mix of nitrogen, phosphate and potassium. We think it is good for farmers,” he said.

In-country demand for fertilisers generally runs highest from July to October.

“The trade is not good at the moment because of the local drought,” said Ko Naing Toe, an importer of Chinese fertiliser. “We haven’t seen a lot of demand recently because the rains haven’t really arrived yet.”

Chinese fertiliser also faces an image problem. While there are well-made Chinese fertilisers along with cheaper brands, it can be tough to convince Myanmar people of the fact, he said.

Still, price remains the main determinant when choosing a fertiliser – and on that criteria, Chinese products win. Ko Naing Toe said that locally produced fertiliser is not able to compete, and imported fertilisers also face an uphill struggle.

Source: Myanmar Times

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