Vietnam's fertilizer industry is experiencing a dynamic phase with sharp price increases and continuously fluctuating demand. As one of the leading agricultural nations, Vietnam not only meets domestic fertilizer needs but also affirms its position in the global supply chain. However, dependence on imported raw materials, global price fluctuations, and new policies create both opportunities and challenges for the industry.

Dynamic Fertilizer Market: New Price Peaks

Early 2025, Vietnam's fertilizer market recorded strong growth, reflecting global trends. According to reliable sources, urea prices – the leading fertilizer type – have surged in international markets, with domestic prices following the upward trend.

- In the Black Sea region, urea prices reached a record increase of $17.5/ton;

- In the Middle East recorded a $13.5/ton increase;

- In Egypt, spot prices for granular urea to the EU reached $459/ton, up $14/ton from previous levels.

In Vietnam, domestic urea prices fluctuated between 11,000-12,000 VND/kg by the end of 2024, significantly higher than early year prices. Factors such as escalating imported raw material costs and high seasonal demand have boosted export activities, particularly to India and Southeast Asia. This movement was partly revealed after global supply chain disruptions, but experts warn that the price increase may not be sustainable if supply continues to fluctuate and new tax policies significantly impact production costs.

Factors Shaping Vietnam's Fertilizer Industry

Raw Material Prices and Import Dependency

Vietnam's fertilizer industry is deeply influenced by the international market due to its dependence on imported raw materials such as gas, ammonia, and potassium. Gas prices account for 80-90% of nitrogen fertilizer production costs, making domestic prices sensitive to global energy market fluctuations. When oil and gas prices rose sharply in late 2024, fertilizer production costs inevitably exploded, pushing selling prices to new highs.

Additionally, Vietnam imports about 50% of its potassium fertilizer needs and a large portion of NPK fertilizers from China, Russia, and Middle Eastern countries. This dependency makes the domestic fertilizer industry vulnerable to geopolitical factors such as conflicts and export restrictions from key countries. The positive performance of domestic plants like Phu My Fertilizer Plant and Ca Mau Fertilizer Plant has helped reduce pressure by meeting about 70% of domestic nitrogen fertilizer demand.

Tax Policy and Cost Pressures

From November 26, 2024, Vietnam's National Assembly passed the amended VAT Law, applying a 5% tax rate on fertilizers (previously exempt). This could increase fertilizer prices by 3-5%, directly affecting farmers and manufacturing companies. While the policy aims to increase budget revenue, many worry this will be a new burden for the agricultural sector already under price pressure.

Export Opportunities and Technological Innovation

Vietnam's fertilizer industry faces significant opportunities due to increasing export demand. With its strategic position and free trade agreements like RCEP, Vietnam can expand market share in ASEAN and South Asian countries. Modern production technology also plays a crucial role; large enterprises like Vietnam Chemical Group (Vinachem) are investing in smart fertilizer production lines to reduce emissions and optimize raw materials, meeting green standards of premium markets like the EU and Japan.

Production and Packaging Trends

Besides export promotion, the domestic fertilizer industry is trending toward organic and environmentally friendly fertilizers, especially in export farming regions like the Mekong Delta. Implementing recycling and circular economy solutions in fertilizer production not only helps reduce environmental impact but also enhances product competitiveness. In this context, fertilizer packaging – such as Thuan Duc's products with copper cylinder printing technology and customized designs – has affirmed its important role in product preservation and marketing for both domestic and international markets.

Register for a Booth at Growtech Vietnam – Enhance Business Efficiency and Affirm Your Brand in the Global Market

Turn your vision into reality at Growtech Vietnam – The leading exhibition for agricultural machinery, equipment, and fertilizers in Vietnam. This event brings together the most advanced technologies and leading industry experts, opening golden opportunities to expand business networks and affirm brands in both domestic and international markets.

Benefits of participating in Growtech Vietnam:

- Access potential customers: The event attracts thousands of visitors, creating conditions for your products to be introduced to quality and diverse customers.

- Elevate brand image: Professional booths not only showcase products but also help affirm the strong position of businesses in this fiercely competitive industry.

- Expand strategic connections: Network with leading experts, partners, and investors, opening opportunities for sustainable business development cooperation.

- Update new technology trends: Witness breakthroughs in production, from advanced machinery and equipment to green fertilizer solutions, helping businesses always lead trends in the digital age.

Don't miss this golden opportunity to expand your business and affirm your position in the industry. Hurry to register for a booth at Growtech Vietnam – where the door to the future of Vietnam's agriculture industry opens!

Source: thuanducjsc.vn