Fertilizer market in Vietnam: move to increase exports to Japan

Date: 19 Mar 2025

By: B& Company

In recent years, the Vietnamese fertilizer market has experienced significant fluctuations driven by global supply chain disruptions and shifts in trade policies. Vietnam has transitioned from being a major fertilizer consumer to an emerging fertilizer exporter, particularly within the Asian fertilizer market.

Production output and main types

Vietnam’s fertilizer production is robust, catering to both local agricultural demands and export needs. The country produces an estimated 8-10 million tons[1] of fertilizer annually with the primary products including:

– NPK Fertilizers: These complex fertilizers are widely used and customized based on specific soil and crop needs. Vietnam has over 40 manufacturers producing NPK fertilizers with total production of ~4 million tons/year, making it a significant segment of the market.

– Nitrogenous Fertilizers (N): Including urea (total output of 3 million tons/year), ammonium sulfate (660,000 tons/year). Urea is the most widely produced nitrogen-based fertilizer in Vietnam, accounting for a large share of both domestic consumption and exports. As for ammonium nitrate, Vietnam currently cannot produce it and must import 100% from other countries.

– Phosphorus Fertilizers (P): Such as single superphosphate (SSP) and diammonium phosphate (DAP) with total production of ~2.5 million tons/year.

– Potassium Fertilizers (K): Vietnam does not have natural potassium reserves, so it imports raw potassium chloride (KCl) to produce potassium sulfate (SOP) and potassium nitrate (NOP).

– Organic and Bio-Fertilizers: Current domestic production is about 600,000 tons/year. However, in response to growing environmental concerns and export market demands, Vietnam is increasing the production of organic fertilizers made from animal manure, composted materials, and beneficial microorganisms.

The majority of fertilizer production facilities are located in Ba Ria-Vung Tau, Dong Nai, Long An, Hai Phong, and Bac Giang provinces, which serve as key distribution hubs for domestic and international markets.

Vietnam – emerging fertilizer exporter in the Asian market

Vietnam - emerging fertilizer exporter in the Asian market

Source: Thainguyengov

Export Situation of Fertilizer Products in Vietnam

In 2024, Vietnam exported nearly 1.7 million tons of fertilizers of all kinds, equivalent to 719 million USD, with an average price of 411 USD/ton (an increase of 12% in volume, 9% in value but a decrease of 2% in price compared to 2023)[2]. In terms of export value, in 2024, Cambodia continued to be Vietnam’s largest export market, accounting for 34%, followed by South Korea with 13% and the Philippines with 6%. In addition, Vietnam is also expanding its market to Europe, where there are higher standards and quality products.

According to forecasts, the global trend of using chemical fertilizers and organic fertilizers in the period of 2024-2029 will reach an annual growth rate of about 6.5-7.5%/year, reflecting the trend of transitioning to sustainable agriculture. This is also an opportunity for Vietnam to improve productivity and export capacity of chemical and organic fertilizer products in the future.

The surge in exports of fertilizer products from Vietnam to Japan

Due to China’s fertilizer export restrictions from July 2023 to July 2024, particularly on urea, nitrogen, and phosphate fertilizers, coupled with geopolitical tensions in the Middle East and increased global fertilizer demand, Japan has sought alternative supply sources. This has led to a significant increase in fertilizer imports from Vietnam. Specifically, in the first 11 months of 2024, Japan’s fertilizer imports from Vietnam reached $12.3 million, a 324% increase compared to the same period last year, while in 2023 it was only $4.12 million with 9,518 tons, a 74.35% decrease in value compared to 2022[3]. This growth is driven by the Japanese government’s encouragement of importers to seek alternative suppliers and the provision of incentives for companies to partner with Vietnamese fertilizer manufacturers, while also aligning with Japan’s increasing focus on sustainable agriculture, leading to a growing demand for organic and eco-friendly fertilizers produced in Vietnam. The sharp increase in export value indicates that the export price of fertilizers from Vietnam to Japan has also increased significantly.

Main Players in Vietnam’s Fertilizer Production

Several key companies dominate Vietnam’s fertilizer industry are domestically invested, with the majority concentrated in the Southeast and Mekong Delta regions.

Examples of fertilizer manufacturing companies in Vietnam

Name	Established year	Location	Business description	Main Products
PetroVietnam Ca Mau Fertilizer Joint Stock Company (PVCFC)	2011	Ca Mau Province	A subsidiary of Vietnam Oil and Gas Group	– Urea
PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo)	2003	HCMC	PVFCCo is a leading enterprise in manufacturing and trading fertilizers and chemicals	– Urea – NPK – Microelement fertilizers
Japan Vietnam Fertilizer Company (JVF)	1995	Dong Nai Province	A joint venture between Japanese and Vietnamese partners	– NPK – NPK_TE fertilizers
Binh Dien Fertilizer Joint Stock Company	1973	HCMC	This company is known for its research and development of high-quality crop-specific fertilizers.	– NPK fertilizers – Organic fertilizers – Bio-fertilizers.
Southern Fertilizer Joint Stock Company (SFC)	1976	HCMC	This company has a strong presence in domestic and export markets.	– NPK – Phosphate – Organic fertilizers.

Source: B&Company synthetic

Vietnamese government policies relating to fertilizer market

To enhance fertilizer exports, the Vietnamese government has implemented key policies to reduce import taxes and promote organic and eco- friendly products:

– Export Tax Reduction: As per Decree 26/2023/ND-CP, effective July 15, 2023, export taxes on DAP and NPK fertilizers were reduced to 0%, easing financial burdens on exporters.

– Promotion of Organic Fertilizers: Decree 109/2018/ND-CP and Decision 4324/QD-BNN-BVTV (2022) encourage organic fertilizer production, meeting international sustainability standards, particularly for markets like Japan.

Business Investments in Fertilizer Production

The signing ceremony memorandum between PVFCCo & Hanwa

The signing ceremony memorandum between PVFCCo & Hanwa

Source: PVFCCo

Leading Vietnamese fertilizer companies are upgrading production technologies to meet export standards:

– PVCFC (PetroVietnam Ca Mau Fertilizer JSC): Focuses on eco-friendly, high-tech fertilizers to fully meet the requirements for officially penetrating the demanding fertilizer markets of Australia and New Zealand, while continuing to enhance quality for existing markets in the Americas. They also have extensively developed specialized fertilizer forms such as slow-release/controlled-release fertilizers, which will help achieve the ultimate goals of proper fertilization: to increase nutrient uptake by crops while reducing environmental harm

– PVFCCo (PetroVietnam Fertilizer and Chemicals Corporation): Signed a strategic partnership agreement with Japan’s Hanwa Corporation on February 24, 2024, ensuring an annual supply of 20,000 tons of urea fertilizer for the Japanese market. This collaboration highlights Japan’s proactive efforts to secure reliable fertilizer sources from Vietnam, further solidifying Vietnam’s role as a key supplier.

Conclusion

Vietnam’s fertilizer industry is well-positioned to expand, especially with growing demand from Japan and other Asian markets, alongside increasing emphasis on organic and sustainable agriculture.

[1] https://kirincapital.vn/

[2] https://baochinhphu.vn/xuat-khau-phan-bon-tang-truong-manh-1022501171858196.htm

[3] https://mekongasean.vn/xuat-nhap-khau-phan-bon-11-thang-tang-ca-luong-va-gia-36736.html

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