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Fertilizer Industry – Vietnam's Fertilizer Import Demand

• Vietnam's total fertilizer demand is approximately 10-11 million tons, with the demand proportions for Urea/NPK/DAP/SA/Potash at 16%/35%/9%/9%, respectively. In 2023, while nitrogen fertilizer (Urea) and phosphate fertilizers (P) had demand of 1.9 million tons and 1.6 million tons, there was an oversupply of 900,000 tons and 350,000 tons, respectively. Meanwhile, potash fertilizers (K) and ammonium sulfate (SA) (demand of 840,000 tons and 780,000 tons) are entirely imported, and Diammonium Phosphate (DAP) imports reached 418,000 tons.
• Vietnam imports SA and DAP fertilizers mainly from China, while Potash is imported from Laos. Although Vietnam's total fertilizer imports have decreased over the past two years, the country remains in a trade deficit for fertilizers since Urea and NPK cannot fully replace SA and DAP.
• DAP-producing companies like DDV and DGC still have potential for production growth if they maintain competitive pricing, as domestic production capacity has not exceeded domestic demand.
• Companies with a high share of NPK and Urea fertilizers tend to have lower gross and net profit margins compared to global companies. As a result, the P/E ratios for firms like DPM, DCM, and BFC tend to be lower than the industry average.