Since Q4 2022, the global fertilizer market has undergone a dramatic reversal, with urea prices dropping sharply, creating new challenges for fertilizer manufacturers and traders worldwide.
Global Fertilizer Prices Fall Across the Board
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According to reports from Argus and Fertecon—two reputable international fertilizer market analytics firms—fertilizer prices have plummeted significantly in recent months.
Global urea prices have weakened across all markets since late 2022 due to sluggish demand and intensified competition among suppliers.
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In Yuzhnyy, urea granule prices fell from USD 611/t FOB (Sep 2022) to USD 335/t FOB (Feb 2023) — a 45% decline in just five months.
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In the Middle East, urea prilled dropped from USD 657/t FOB to USD 372/t FOB.
World urea prices are expected to remain stable or slightly lower in Feb–Mar 2023.
Meanwhile, DAP prices have fallen for 10 consecutive weeks, as buyers hold off in expectation of further reductions. DAP stands at USD 660/t CFR in India and USD 610–635/t FOB in the U.S., with global trading activity subdued.
MOP potash prices also continue to slide amid weak demand, especially in ASEAN markets (down USD 20/t to USD 525–560/t CFR) and modest decreases in Brazil and the U.S..
Compound NPK fertilizers show limited activity; prices are low as buyers delay purchases.
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China NPK 15-15-15: USD 700–735/t CFR
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India NPK 10-26-26: USD 610–625/t CFR
The overall global decline reflects reduced production costs, China’s reopening (boosting supply), improved logistics, and falling freight rates—while demand remains soft, forming a new low-price equilibrium worldwide.
Domestic Challenges for Vietnamese Fertilizer Companies
According to Vietnam’s Ministry of Agriculture and Rural Development (MARD), the domestic agricultural sector requires over 10 million tons of fertilizer annually, including:
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Urea: 2.2 million tons
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SA: 0.9 million tons
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Kali: 0.96 million tons
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DAP: 0.9 million tons
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NPK: 4 million tons
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Phosphate: 1.8 million tons
However, due to high fertilizer prices in 2022, farmers reduced purchases, lowering domestic demand by 20–30%, depending on region. As a result, domestic consumption and exports both dropped sharply.
By late 2022, the global fertilizer price downturn made exports less profitable, pushing firms to compete in an oversupplied home market during the off-season.
While falling prices ease farmers’ costs, they put enormous pressure on domestic fertilizer producers:
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Agents buy cautiously, expecting further price drops.
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Inventories grow while output remains stagnant.
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Sales prices fall faster than input costs, compressing profit margins.
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Some producers have had to sell below production cost to clear stock.
This combination of factors marks 2023 as a year of significant risk and testing for Vietnam’s fertilizer industry.
Rays of Hope Amid Market Turbulence
Despite the challenges, there are encouraging signs. Agricultural exports have been strong, prices stable, and yields high—helping farmers reinvest in production and gradually reviving domestic fertilizer demand.
Globally, with looming economic recession risks, many countries are prioritizing food security and expanding reserves of key staples such as rice, wheat, and grains. Consequently, fertilizer remains an indispensable input that cannot be easily replaced.
Outlook: From “Bright” to “Grey,” With Pockets of Resilience
The fertilizer market has swiftly shifted from a “bright” to a “grey” outlook within just a few months. Both global and domestic producers face unprecedented volatility and must act decisively to solve issues of sales, inventory management, and financial pressure.
Ultimately, this turbulent period will reveal the true internal strength of each company within Vietnam’s fertilizer industry—testing adaptability, strategy, and resilience in an evolving global landscape.