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OVERVIEW OF FERTILIZER INDUSTRY 2024

GLOBAL MARKET

GLOBAL UREA MARKET

~

million tons of UREA

PRODUCED IN 2024

Production:Urea production is highly dependent on natural gas prices, which is the main input material for production. In 2024, despite its decrease compared to the pre-COVID-19 period, gas prices remained high in some regions, particularly Europe. This is due to the Russia-Ukraine conflict persisted since early 2022 with no signs of cooling down.

Major urea-producing countries such as China, India, and the Middle East continue to dominate the global market. In 2024, 187 million tons of urea were produced, as estimated, mainly in Saudi Arabia, Qatar, Russia, China, and India.

Consumption: Despite high nominal consumption, the growth rate of urea demand has slowed due to rising prices and a shift towards more environmentally efficient fertilizers. The largest consumers include India, China, and Brazil, which are among the major markets worldwide. Additionally, countries such as the United States, Australia, Argentina, Pakistan, Bangladesh, Ethiopia, and several European nations have imported and consumed a large amount of fertilizers.

The United States remains a significant importer of urea and a key driver of global trade, despite a notable increase in domestic production capacity over the past decade. China and India are the largest nitrogen fertilizer consumers, accounting for approximately 40% of global urea demand.

0

million tons

GLOBAL UREA CONSUMPTION IN 2024

In 2024, the estimated consumption of global urea, in both agricultural and industrial sectors, reached 193 million tons. The agricultural sector accounts for the majority (over 80% of total consumption), while the remainder is used in various industrial manufacturing sectors such as adhesives, automotive, and others.

Pricing: After the price adjustment in Q3 and Q4 of 2023, urea price has shown signs of recovery since Q2 of 2024. In general, Southeast Asia continued to maintain a higher price compared to China and the Baltic region, but still lower than the Middle East, as the increase in supply pressure in the region compared to the previous period.

GLOBAL POTASSIUM MARKET

0

million tons

GLOBAL POTASSIUM PRODUCTION IN 2024

Production: an estimated amount of 65 million tons of potassium was produced worldwide in 2024, mainly in Canada (approximately accounting for 30% of global production). Russia, Belarus, and Israel are also major suppliers of potassium to the global market.

High-quality potassium sources in large quantities are limited to a few countries. Canada is the world’s largest producer and exporter of potassium, accounting for 40% of total reserves. More than 75% of the world’s potassium production comes from the six largest producers. Therefore, these producers have a significant influence on not only the supply chain but also potassium price in the world.

By 2024, Canada has the world’s largest potassium reserves with 1.1 billion tons, mainly produced in Saskatchewan, where many potassium mines operate. Belarus GLOBAL POTASSIUM PRODUCTION IN 2024 65 million tons holds 750 million tons of potassium, with Belarus Kali as the largest producer who has large reserves and plays an important role in the global market. Russia has 650 million tons, with Uralkali as a major producer; but facing impacts of economic sanctions. Despite being the world’s largest consumer, China holds around 180 million tons of potassium and imports a large amount of potassium to meet domestic demand. Germany has some large potassium mines and is one of the key producers in Europe, with the reserves estimated at 150 million tons. Israel holds around 100 millions of potassium, mainly produced from the mines in the Dead Sea, in which Israel Chemicals is the leading potassium producer.

Due to the Western sanctions in recent years, the exportation activities of Russia and Belarus are restricted, affecting supply sources in some regions. However, through intermediary countries, the supply sources have shifted towards the major markets such as China, Brazil, Argentina, Mexico, and Europe. Thanks to that, the disruption in potassium supply chain has eased compared to previous years.

Consumption:In 2024, the world’s potassium consumption reached 71 million tons as estimated, up 4.4%, equivalent to 3 million tons from 2023, 68 million tons, mainly due to the growth of key regions/countries such as China, 16.5 million tons and Latin America, 17 million tons, in which Brazil consumed around 10 million tons; North America, 10.5 million tons; and other Asian countries, around 10.5 million tons. Indonesia is the largest potassium consumer in Southeast Asia. Along with China and India, this country has certain effects on potassium price in the region.

Pricing: Potassium price in 2024 experienced significant fluctuations, following a much sharper decline compared to 2023. This results from the improvement in supply sources in Russia and Belarus and the import decrease in some major markets such as the United States and Brazil, where the supply from previous years is still abundant, affecting the global potassium price.

GLOBAL DAP MARKET

Production: China, Morocco, Russia, Saudi Arabia, Egypt, Tunisia, Algeria, South Africa, and Brazil are the world’s leading countries in DAP/MAP supply while phosphate production in the United States has significantly dropped, by 30% over the past decade as estimated. At present, Morocco holds the largest phosphate reserves in the world with 50 billion tons, accounting for approximately 70% of the global reserves. This country is also the major DAP/MAP producer. China is not only one of the largest DAP producers but also plays a crucial role in the global fertilizer industry with reserves of around 3.8 billion tons. Egypt is one of the largest DAP/ MAP producers with a welldeveloped fertilizer industry and reserves of 2.8 billion tons. Tunisia, located in North Africa, holds significant phosphate reserves of around 2.5 billion tons and is one of the global leading DAP producers. Saudi Arabia holds approximately 1.4 billion tons. It has increased production in recent years and plans to further expand in the future

China’s trade policy has a significant impact on the global phosphate market. In 2023, China’s DAP/MAP export decreased by approximately 30% from 2021 due to export restrictions imposed by the government to stabilize the domestic market. China continues to enforce restrictions on fertilizer export, including urea, DAP, and MAP (Mono-ammonium Phosphate). The government has required producers to temporarily suspend applications for export certification, lengthened customs clearance and limited fertilizer export turnover.

AS ESTIMATED, THE GLOBAL DAP/ MAP PRODUCTION EXCEEDED

>

million tons

IN 2024

In terms of production, in 2024, global DAP/MAP production exceeded 50 million tons, as estimated, in which China accounted for 20 million tons and the other came from the United States, Morocco, Russia, and Saudi Arabia

Consumption:In 2024, global DAP/MAP consumption was estimated to reach 53 million tons, an increase of 2 million tons, up 4% from 2023. India and Brazil are the largest DAP/MAP importers due to their low domestic production. These countries also have significant influence on the global DAP/ MAP supply and prices.

In terms of import, major DAP/ MAP importing countries in 2024 include India - more than 5 million tons, Brazil - around 4.5 million tons, the United States - around 1 million tons, Australia - more than 1.2 million tons, and Pakistan - around 0.9 million tons.

Pricing: DAP price showed a downward trend from Q1/2023, hit the bottom in Q2/2023, and gradually recovered in the last six months of 2023. Entering 2024, DAP price remained stable in Q1/2024, experienced movements in Q2/2024, and recovered to the price seen at the end of the previous year. One of the main reasons for this fluctuation is China’s DAP export restrictions, making it difficult for major importers, especially India, to access the international supply.

GLOBAL NPK MARKET

Production:According to IFA, global NPK production has shown steady growth, increasing from 114.9 million tons in 2016 to 119.0 million tons in 2020, but slightly decreasing to 118.5 million tons in 2021. NPK production in regions such as Western Europe and South Asia remained stable while East Asia experienced a slight decline in production in 2021 compared to 2020. Asia, particularly South Asia, maintained relatively stable production. However, East Asia’s production declined from 72.6 million tons in 2020 to 72.5 million tons in 2021. Central Europe saw a production decrease from 5.1 million tons in 2017 to 4.2 million tons in 2021, due to the impact of environmental policies and price fluctuations. Western Europe has maintained stable production at approximately 14.9 million tons from 2019 to 2021.

Unit: Mt product
AREA 2016 2017 2018 2019 2020 2021
West Europe 14.9 14.9 15.0 15.0 14.9 14.9
Central Europe 4.6 5.1 5.0 4.8 4.9 4.2
EECA 10.9 11.2 11.4 11.4 11.3 11.4
Americas 3.2 3.2 3.3 3.6 3.6 3.6
Africa 3.3 3.2 3.2 3.2 3.2 3.3
West Asia 3.6 4.4 4.4 4.5 4.8 4.8
South Asia 3.4 3.4 3.5 3.2 3.8 3.7
East Asia 71.1 71.2 73.7 72.2 72.5 72.6
WORLD 114.9 116.7 119.5 117.9 119.0 118.5
Source: IFA - January 2023
Mô tả hình ảnh

Based on IFA’s NPK production report for the 2016 - 2021 period, the estimated NPK production for the 2022 - 2024 period is 120 - 122 million tons. This increase can be attributed to the rising demand from the agricultural sector, driven by global population growth, which boosts food demand and expands cultivated land areas. Additionally, the growing demand for organic fertilizers and sustainable agricultural solutions has contributed to the development of new NPK products.

THE TOTAL GLOBAL NPK CONSUMPTION IS ESTIMATED TO REACH

0

million tons

IN 2034

Consumption:According to Argus, global NPK consumption in 2020 was 99.7 million tons and is projected to increase to approximately 107.2 million tons by 2034, with a compound annual growth rate (CAGR) of around 0.5% per year. Accordingly, Africa is expected to experience the strongest growth, rising from 2.5 million tons in 2020 to 5.7 million tons in 2034, with a CAGR of 6.0%. This reflects agricultural development and increasing food demand driven by population growth. South Asia is expected to see more modest growth, with consumption increasing from 5.2 million tons to 5.5 million tons, corresponding to a CAGR of 0.4%. Northeast Asia shows a slight decline in consumption, projected to decrease from 63.8 million tons to 63.1 million tons. Western Europe maintains relatively stable consumption but lacks significant growth, while Central and Eastern Europe show modest growth. North America is forecasted to have low growth.

Forecast growth in regional NPK consumption, 2020-34
Unit: thousand tons
REGIONS 2020 2024 2029 2034 +/-
2020-34		 CAGR
2020-34
Northeast Asia 63,790 65,107 64,021 63,082 -707 -0.1%
Southeast Asia 12,613 13,591 13,995 14,202 1,589 0.9%
Central and eastern Europe 4,188 4,586 4,636 4,730 542 0.9%
Africa 2,505 4,134 4,877 5,670 3,165 6.0%
Russia and central Asia 1,465 1,510 1,736 1,860 395 1.7%
South Asia 5,200 5,331 5,394 5,462 262 0.4%
Latin America and Caribbean 2,774 3,556 3,961 4,279 1,505 3.1%
Western Europe 5,090 4,921 5,092 5,327 237 0.3%
Middle East 1,348 1,404 1,501 1,649 300 1.4%
North America 717 723 722 721 4 0.0%
Australasia 70 107 148 184 115 7.2%
Global Total 99,760 104,970 106,083 107,166 7,406 0.5%
(Source: Argus)

BASED ON CURRENT TRENDS, GLOBAL NPK CONSUMPTION CAN REACH APPROXIMATELY

108 - 109

million tons

during the 2024 - 2025 period, with significant contributions from Africa and Southeast Asia.

Pricing: Since NPK market includes various formulations and depends on specific demand characteristics, NPK prices vary across producers and key importing markets. For the 16-16-16 NPK formulation, based on observations from Russian and Chinese exporters over the past two years, NPK prices have generally declined. Prices fell sharply and continuously from Q1/2023 to Q3/2023, then stabilized in Q4/2023. In 2024, NPK prices showed signs of a slight decline, hitting the bottom in Q2/2024, followed by a gradual recovery in Q3/2024. NPK price movements are heavily influenced by global urea, potassium, and DAP prices.

DOMESTIC FERTILIZER MARKET

DOMESTIC SUPPLY AND DEMAND

No. Products Domestic Demand Estimated Supply Supply-Demand Balance
Year 2024 Forecast 2025 Domestic Import
1 Urea 2,100 - 2,200 2,200 - 2,300 2,400 - 2,600 250 - 300 Meet domestic and export needs
2 DAP 700 - 800 800 - 900 500 - 600 300 - 400 Shortfall covered by exports
3 Potassium 900 - 1,000 1,000 - 1,200 0 1,000 - 1,200 100% imported
4 NPK 3,200 - 4,000 3,500 - 4,200 3,600 - 5,000 350 - 450 Surplus but high-grade NPK import
5 SA 1,100 - 1,200 1,100 - 1,200 0 1,200 - 1,300 100% imported
6 Phosphate 1,800 - 1,900 1,800 - 1,900 1,500 - 2,000 - Meet domestic demand
7 Organic Fertilizer 2,000 - 2,500 2,200 - 2,600 2,900 - 3,000 400 - 500 Domestic supply meets demand, but high-quality
imports are still needed

KEY INFLUENCING FACTORS

Prices of energies, including oil, natural gas and coal, play a crucial role in the input costs of fertilizer industry, as many production processes rely heavily on these energy sources. Natural gas is the primary raw material for ammonia production, which is a key input for urea manufacturing. Typically, natural gas cost accounts for 60-75% of urea production cost. Therefore, fluctuations in natural gas price have a direct impact on urea price. In 2024, natural gas price surged, particularly in Europe and Asia, leading to higher production costs for urea and other nitrogen-based fertilizers. Additionally, oil and its derivatives are key factors influencing transportation costs. In the fertilizer industry, the transportation cost of raw materials (such as potassium and phosphate) and finished fertilizers plays an essential role. Higher oil price leads to increased transportation cost, ultimately raising the final selling price of fertilizers. Coal, apart from its role as an energy source, is used in certain fertilizer production processes, particularly in northern regions, where coal is a primary raw material for urea and ammonia production. Rising coal price leads to higher production cost, especially in the regions that still rely on coal energy to operate factories

Vietnam’s fertilizer demand is generally assessed as stable or slightly increasing, from 11 to 12 million tons per year. This is driven by favorable prices of key agricultural products such as rice, coffee, and fruit trees in recent times, particularly as Vietnam’s agricultural export continues to grow, leveraging benefit from bilateral and multilateral trade agreements. As a result, this is a key factor driving the expansion of Vietnam’s fertilizer industry in the coming time.

ACCORDING TO SOME EXPERTS, THE ESTIMATED GROWTH RATE OF VIETNAM’S FERTILIZER INDUSTRY IS APPROXIMATELY
 5% per year IN THE 2025 – 2033 PERIOD

Product diversification is a defining characteristic of Vietnam’s fertilizer industry, and this trend is expected to continue in the coming years. Single fertilizers previously dominated farming practices, but there has been a gradual shift toward NPK fertilizers, particularly in high-value export-oriented agricultural sectors. Additionally, due to market competition, manufacturers are increasingly investing in R&D to develop new products with enhanced features, adding more value for end-users. The presence of imported fertilizers has also contributed to a more diverse and dynamic domestic market. Some producers and distributors are now adopting a “product package” sales strategy to leverage new market opportunities and enhance competitiveness.

High competition pressure exists in both domestic and imported markets, particularly locally produced fertilizers such as urea and NPK, due to domestic production capacity exceeding consumption, or even oversupply at certain times. Examining import-export data from recent years indicates that Vietnam remains a net exporter of fertilizers, as Chinese manufacturers face export quota restrictions, creating opportunities for Vietnamese producers to expand their international market presence. However, Vietnam still relies 100% on imported potassium and partially on DAP as raw materials for NPK production plants. If the global supply chain is disrupted due to geopolitical tensions, it can lead to domestic supply shortage in the domestic fertilizer industry

The agricultural sector plays a crucial role in Vietnam’s economy, accounting for approximately 10% of GDP and employing around 40% of the workforce. Therefore, agricultural development directly impacts the fertilizer demand. In other words, when agricultural production grows, the demand for fertilizers increases to enhance crop productivity. This creates opportunities for fertilizer manufacturers to boost production and expand their market presence.

Vietnamese agriculture has two main crop seasons i.e. Winter-Spring and Summer- Autumn, requiring a different amount of fertilizers in each season. This cyclicality causes fluctuations in fertilizer demand by season, region, crop, etc., directly affecting the production plan and supply of the manufacturers. At the beginning of a crop season, fertilizer demand typically surges, putting pressure on production at fertilizer plants. Conversely, during the off-season, demand can drop significantly, leading to product surplus and affecting the sales performance of fertilizer companie

In general, domestic fertilizer demand typically peaks in Q2 and Q4, while the remaining months tend to be off-season periods. Fertilizer prices can be influenced by seasonal factors, with higher demand during peak seasons driving prices up, and lower demand causing prices to decline. Fertilizer manufacturers must develop flexible sales strategies to adapt to market fluctuations. In addition, factors such as weather conditions, crop cycles, and government policies can contribute to price volatility and impact the fertilizer consumption.

The agriculture sector is currently transitioning towards green, sustainable, and environmentally friendly development to meet stricter consumer market requirements. This shift also requires fertilizer manufacturers to renovate their production and products to meet the growing demand for organic and eco-friendly fertilizers.

The fertilizer industry is closely linked to the agriculture sector, making it highly susceptible to seasonal and weather conditions. Climate change and extreme weather events such as floods, droughts, and storms are becoming more frequent, disrupting crop cycles and causing agricultural losses. Unfavorable weather conditions significantly reduce fertilizer demand, as farmers may reduce planting areas or skip planting seasons. Prolonged droughts may lead to fertilizer consumption, impacting the revenues of fertilizer manufacturers and distributors. Abnormal weather, such as excessive rainfall, can decrease fertilizer efficiency by washing away nutrients before crops can absorb them. This not only wastes fertilizer but also forces farmers to apply additional fertilizers, causing fluctuations in overall demand. In general, crop yields depend on weather and climate conditions. Favorable weather leads to higher crop production, which in turn increases fertilizer demand. Conversely, adverse weather conditions reduce fertilizer demand due to smaller planting areas or lower-than-expected crop yields.