Domestically assembled cars "free fall"; Fertilizer prices drop 40% this year

Domestically assembled cars "free fall"

A newly released report by the General Statistics Office shows that in May, an estimated 37,000 new cars were added to the Vietnamese market, including imported and domestically produced cars, continuing to decrease by 4.5% compared to the previous month.

Of which, the number of completely built-up cars imported to Vietnam is estimated at 10,000 vehicles in May, with a total turnover value of 270 million USD. This is the lowest number of imported cars since the beginning of 2023.

The number of domestically produced and assembled cars decreased last month.

Compared to the 12,323 units and the turnover value of 288 million USD in April (according to the report of the General Department of Customs), imported cars decreased by 18.9% in volume and 6.3% in value. Compared to the same period in 2022, the number of imported cars in May also decreased sharply by 27.9% in volume and 25.9% in value.

In the first 5 months of 2023, imported cars to Vietnam are estimated to reach a total of 64,344 units with a total turnover value of 1,482 million USD. Compared to the same period in 2022, imported cars still increased by 26.7% in volume and 16.4% in value.

Not only imported cars, but also domestically produced and assembled cars also decreased last month. The number of domestically produced and assembled cars in May 2023 is estimated at 27,000 units, a slight increase of 2.2% compared to April (with 26,400 units) but only 67.4% compared to the same period in 2022. In the first 5 months of 2023, the total number of cars produced and assembled domestically by enterprises is estimated at 133,600 units, a sharp decrease of 24% compared to the same period last year.

According to statistics from the Vietnam Automobile Manufacturers Association (VAMA) and two major car manufacturers outside VAMA, Hyundai Thanh Cong and VinFast, the total number of cars sold in the entire market in April 2023 reached only 30,799 units, down 16.2% compared to the previous month and down 40.5% compared to the same period last year. Currently, car sales data for May have not been compiled, but according to the assessment, the possibility of recovery is not much.

Fertilizer prices could fall 40% this year

Bao Viet Securities Joint Stock Company has just released a report on the fertilizer industry in 2023. Accordingly, global fertilizer supply is expected to increase slightly this year and demand will also recover slightly. Due to the increased supply, fertilizer prices such as Urea, Potassium and DAP may decrease by up to 40% compared to 2022.

In terms of supply, in 2022, fertilizer supply was tightened as China and Russia both restricted fertilizer exports. However, by 2023, both of these fertilizer “powerhouses” had lifted and increased fertilizer export quotas. Therefore, it is expected that fertilizer supply in 2023 will be abundant globally.

Fertilizer supply in 2023 will increase slightly, fertilizer prices are expected to decrease by 40% compared to 2022.

For potash fertilizer prices, the World Bank forecasts an average potash fertilizer price of $500/ton in 2023, down 40% from last year as supply recovers faster than demand. In the medium term, potash fertilizer supply in 2022-2025 is expected to recover at a low level due to delays in capacity expansion in Eastern Europe, which accounts for about 60% of the total additional supply in the period.

Therefore, the price of DAP fertilizer in 2023 is estimated by research firm Fitch Rating at 550 USD/ton, down 39% compared to the same period in 2022.

Currently, fertilizer prices are assessed to have fallen to their lowest level in the past 2 years. This helps farmers actively resume production after a period of losses due to skyrocketing fertilizer prices. However, low fertilizer prices create great pressure on manufacturing enterprises. Therefore, in this context, to harmonize the interests of manufacturers and farmers is the problem of reducing production costs and lowering product prices. In addition, according to Dr. Phung Ha - Vice President and General Secretary of the Vietnam Fertilizer Association, it is necessary to review and remove obstacles to Law No. 71/2014/QH13 (Tax Law 71) proposing to put fertilizers under VAT. Currently, fertilizer manufacturing enterprises are not allowed to deduct VAT costs incurred during the production process. This reality forces enterprises to add them to production costs, causing selling prices to skyrocket.

Since then, the cost of domestically produced fertilizers has increased by 7-8%, forcing farmers to pay higher prices.

Pepper prices continue to increase in the Southeast

Pepper prices today (May 31) continued to increase in the Southeast region and remained stable in the Central Highlands region.

In Dak Lak and Dak Nong provinces, pepper prices today (May 31) were purchased at 74,000 VND/kg, the same as yesterday. In Gia Lai province, pepper prices today were also the same as yesterday at 72,500 VND/kg. In Dong Nai, pepper prices today were at 72,500 VND/kg, an increase of 1,000 VND/kg. Similarly, in Ba Ria - Vung Tau province, pepper prices reached 75,500 VND/kg, continuing to increase by 1,000 VND/kg compared to yesterday. In Binh Phuoc province, pepper prices today were purchased at 74,500 VND/kg, an increase of 1,000 VND/kg compared to yesterday.

Thus, pepper prices today (May 31) increased in the provinces and cities of the Southeast region and remained stable in the Central Highlands region. With the increase, pepper prices have reached the price mark of 75,500 VND/kg. The reason for the increase is still due to concerns about supply shortage.

Pepper prices today, May 31, continue to increase in the Southeast region.

In the export market, the price of Vietnamese black pepper remains at 3,500 USD/ton for 500 g/l, 3,600 USD/ton for 550 g/l; the price of white pepper is at 5,000 USD/ton. The International Pepper Community (IPC) listed the price of Lampung black pepper (Indonesia) at 3,592 USD/ton, down 0.03%; the price of Brazilian black pepper ASTA 570 at 2,950 USD/ton; the price of Kuching black pepper (Malaysia) ASTA remains at 4,900 USD/ton.

In the world market, there was a slight decrease in Indonesia but remained stable in other countries. Accordingly, the price of Lampung black pepper in Indonesia decreased by 0.11% to 3,588 USD/ton. The price of Muntok white pepper in this country is decreasing by 0.1% to 6,103 USD/ton. The price of Kuching ASTA black pepper in Malaysia remains stable at 4,900 USD/ton; while the price of ASTA white pepper in this country is still 7,300 USD/ton. For the Brazilian market, the price of ASTA 570 black pepper is at 2,950 USD/ton.

In Vietnam, the export price of black pepper of 500 and 550 g/l is at 3,500 and 3,600 USD/ton, respectively. The export price of white pepper is at 5,000 USD/ton.

Experts say that if the practice of cutting down pepper to switch to fruit trees continues, there may be a shortage of pepper supply in the next 3 years. If Vietnam's output drops sharply in the next 3 years due to the wave of crop conversion, farmers may suffer losses. At the current price, farmers have made a profit. However, the economic efficiency of this crop is still considered lower than many other crops (such as durian). Therefore, pepper is still not attractive to growers to increase acreage.

Domestic coffee price at 61,100 VND/kg

Domestic coffee prices today (May 31) in the Central Highlands provinces remained stable.

Specifically, the price of green coffee beans (coffee beans, fresh coffee beans) in Lam Dong province, in districts such as Bao Loc, Di Linh, Lam Ha, coffee is purchased at a price of 60,400 - 60,500 VND/kg.

Coffee prices in Gia Lai and Kon Tum provinces stood at 60,800 VND/kg.

In Dak Nong province, coffee is purchased at a high price of 61,100 VND/kg.

Today's coffee price in Dak Lak province, in Cu M'gar district, is currently at 61,000 VND/kg. In Ea H'leo district, Buon Ho town, the price is 61,100 VND/kg.

Compared to the same period last week, coffee prices in the domestic market increased sharply by more than 6,000 VND/kg.

For world coffee prices, coffee prices on both exchanges today decreased.

Vietnam's coffee exports fell 2.2% in the first five months of 2023 from a year earlier to 882,000 tonnes, according to the General Statistics Office of Vietnam. The country's coffee exports in May were estimated at 165,000 tonnes, worth $418 million.

Vietnam’s coffee crop output this year is also forecast to decrease. According to the Vietnam Coffee and Cocoa Association (VICOFA), the output in the 2022-2023 crop is expected to decrease by about 10-15% compared to the 2021-2022 crop to about 1.47 million tons.

According to experts, Vietnam's coffee exports are receiving good support from record high domestic and transaction prices to aim for a turnover of 4 billion USD in 2023.