Bags of fertiliser are loaded on to a truck (Photo: VNA) Hanoi (VNA) - The imposition of temporary safeguard duties on DAPand MAP fertiliser imports into Vietnam, which came into effect on August 19,is an effort to help protect the domestic fertiliser industry but might push upproduction costs for farmers.
Under the Ministry of Industry and Trade’s decision, the temporarysafeguard tax has been set at 1,855,790 VND (82 USD) per tonne, and iseffective from August 19, 2017 to March 6, 2018, or until theMoIT releases a decision to impose an official measure. The imposition oftaxes is also in line with the international rules of the World TradeOrganisation (WTO).
According to the director of the ministry’s Department of Chemicals, Nguyen VanThanh, the imposition of safeguard duties will benefit domestic fertiliserproducers because they will be able to proactively control their supply andwill not be significantly affected by the import sources.
This is also a good opportunity for local enterprises to dominate the market,while the tax imposition will create conditions to revive “zombie” enterprisesproducing DAP such as Dinh Vu and DAP 2 Lao Cai.
Pham Ngoc Hung, vice chairman of the Vietnam Anti-counterfeiting Fund, said theapplication of trade defence measures would help fight dumping from foreignexporters and partly protect the interests of consumers in the country.
"Of course, with the imposition, importers will find it difficult becauseinput costs will be higher. But those who need the most attention are farmersbecause we are not sure if they will benefit or be disadvantaged," Hungsaid.
There might be a case that local producers take advantage of the higher tax onimports to create an artificial lack of goods and push prices up, causingdifficulties for farmers, Hung said.
Therefore, the Government must ensure that farmers are not negatively affectedby the tax imposition. Local fertiliser suppliers and producers should be askedto maintain or reduce selling prices and their compliance should be supervised.
According to experts, the imposition of a temporary safeguard tax is only aband-aid, which is unable to solve problems faced by the local fertiliserindustry and businesses.
Nguyen Hac Thuy, Vice Chairman and Secretary General of the Vietnam FertiliserAssociation, said with a designed capacity of about 660,000 tonnes of DAP peryear, Vietnamese enterprises could satisfy about 80 percent of local demand.
But now the production technology is not advanced and synchronous, so made-inVietnam products do not meet the international standard of 62 percentnutritional content. The nutritional content in Vietnamese products reachesless than 60 percent while DAP imports from abroad such as USA, Canada, China, theRepublic of Korea, Japan are of higher quality.
Thus, according to Thuy, the imposition of safeguard duty is not enough. DAPfactories in Vietnam must invest in technology to improve the quality ofproducts and reduce prices. If they can do so, both producers and farmers willsee the benefits.-VNA
Under the Ministry of Industry and Trade’s decision, the temporarysafeguard tax has been set at 1,855,790 VND (82 USD) per tonne, and iseffective from August 19, 2017 to March 6, 2018, or until theMoIT releases a decision to impose an official measure. The imposition oftaxes is also in line with the international rules of the World TradeOrganisation (WTO).
According to the director of the ministry’s Department of Chemicals, Nguyen VanThanh, the imposition of safeguard duties will benefit domestic fertiliserproducers because they will be able to proactively control their supply andwill not be significantly affected by the import sources.
This is also a good opportunity for local enterprises to dominate the market,while the tax imposition will create conditions to revive “zombie” enterprisesproducing DAP such as Dinh Vu and DAP 2 Lao Cai.
Pham Ngoc Hung, vice chairman of the Vietnam Anti-counterfeiting Fund, said theapplication of trade defence measures would help fight dumping from foreignexporters and partly protect the interests of consumers in the country.
"Of course, with the imposition, importers will find it difficult becauseinput costs will be higher. But those who need the most attention are farmersbecause we are not sure if they will benefit or be disadvantaged," Hungsaid.
There might be a case that local producers take advantage of the higher tax onimports to create an artificial lack of goods and push prices up, causingdifficulties for farmers, Hung said.
Therefore, the Government must ensure that farmers are not negatively affectedby the tax imposition. Local fertiliser suppliers and producers should be askedto maintain or reduce selling prices and their compliance should be supervised.
According to experts, the imposition of a temporary safeguard tax is only aband-aid, which is unable to solve problems faced by the local fertiliserindustry and businesses.
Nguyen Hac Thuy, Vice Chairman and Secretary General of the Vietnam FertiliserAssociation, said with a designed capacity of about 660,000 tonnes of DAP peryear, Vietnamese enterprises could satisfy about 80 percent of local demand.
But now the production technology is not advanced and synchronous, so made-inVietnam products do not meet the international standard of 62 percentnutritional content. The nutritional content in Vietnamese products reachesless than 60 percent while DAP imports from abroad such as USA, Canada, China, theRepublic of Korea, Japan are of higher quality.
Thus, according to Thuy, the imposition of safeguard duty is not enough. DAPfactories in Vietnam must invest in technology to improve the quality ofproducts and reduce prices. If they can do so, both producers and farmers willsee the benefits.-VNA
VNA
