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Fertilizer industry – Domesitc fertilizer selling prices are expected to decrease slightly compared to the world selling price in 2025

• Domestic fertilizer selling prices are expected to decrease according to the downward trend of world fertilizer prices. However, we expect domestic fertilizer prices to fall lower than world fertilizer prices, specifically, domestic Urea/DAP/NPK fertilizer prices will decrease by 3%/2%/2% YoY, respectively.
• According to the World Fertilizer Association (IFA) and the World Bank, the world selling price of Urea/DAP/Potassium fertilizer decreased by 7%/8%/3% YoY respectively due to the expected decrease in fertilizer demand from India and Brazil, combined with the decrease in the price of gas, coal and agricultural products (rice, rice).
• Domestic fertilizer prices are expected to decrease less than world fertilizers thanks to:
o (1) demand increases when the weather is favorable in the domestic market while agricultural product prices remain high.
o (2) domestic manufacturers increase selling costs increase to retain customers.
o (3) the VAT law is likely not to take effect directly in 2025 due to the need to wait for specific guidance decree information, so it has not helped businesses save costs.
o (4) The fluctuations in supply and demand of each type of fertilizer in the world are different, so the impact on each type of domestic fertilizer will be different.
• The gross profit margin of the fertilizer industry in 2025 is expected to increase thanks to oil prices falling faster than domestic fertilizer selling prices, while businesses remain the same or only slightly reduce selling prices. However, the increase in selling costs will prevent the net profit margin from increasing sharply.