Market and product

Geopolitical turmoil, supply chain disruptions, and soaring raw material costs are driving a sharp increase in fertilizer prices in Vietnam in 2026. Although domestic supply remains secure thanks to strong local production capacity, rising costs are putting additional pressure on agricultural production.

Global Market Enters a High-Price Cycle

From May to early June 2026, the global fertilizer market continued to experience significant volatility due to geopolitical tensions in the Middle East and risks to international supply chains.

One of the most closely watched hotspots is the Strait of Hormuz—a strategic shipping route that handles about 20-25% of the world’s energy and 25-30% of global liquefied natural gas (LNG). Disruptions in this area have driven up transportation costs and impacted the supply of natural gas, a key input for fertilizer production.

The Middle East currently accounts for about 35-40% of global urea exports. As a result, any instability in this region quickly affects the global fertilizer market. Many production facilities have had to adjust or cut output due to surging raw material and logistics costs.

In addition, natural gas prices continue to soar, pushing up the costs of producing ammonia and other nitrogen fertilizers. Sulfur prices, a key material in DAP and many other chemical fertilizers, have also increased by two to two-and-a-half times compared to previous levels.

The combination of tightening supply and rising production costs has pushed global fertilizer prices to new highs. In May 2026, international urea prices rose by an average of about 50%. In the United States, urea prices increased 45% year-on-year; anhydrous ammonia rose 37%; UAN28 climbed 29%; while DAP and MAP were up about 15%.

Protective trade measures and increased strategic stockpiling have also added pressure to the market. Many countries have ramped up agricultural input reserves to ensure food security amid risks from conflict and climate change.

Domestic Supply Stable but Prices Rise Sharply

Despite global impacts, Vietnam’s domestic fertilizer supply is considered basically stable due to robust local production capacity.

Each year, Vietnam consumes about 9–10.5 million tons of inorganic fertilizer and 3–5 million tons of organic fertilizer. Urea demand alone is about 1.8 million tons per year, while domestic production capacity reaches about 2.6 million tons from four major plants.

However, the fertilizer industry still relies heavily on imported raw materials. Vietnam currently imports all of its potash needs and is also dependent on imported ammonia, sulfur, and other key inputs. This means domestic fertilizer prices are directly affected by global market fluctuations.

Domestic consumption patterns are also highly seasonal. The beginning of the year is the main planting season, with high demand and low inventories at many businesses. Conversely, from June to November, demand drops sharply during the off-season.

Since March 2026, prices for many types of fertilizers in the domestic market have increased by about 40–50% compared to the start of the year. Ammonium phosphate (DAP) has seen the most significant rise, with Korean DAP prices reaching around 1.13 million VND per bag, while Chinese DAP is up about 11% year-on-year. Phu My urea prices are around 553,100 VND per bag. NPK fertilizers have also increased by several thousand to about 50,000 VND per bag depending on type.

Fertilizer prices are rising even as many agricultural products have not seen a corresponding increase, adding to the cost burden for producers. In some areas, farmers have been forced to adjust cultivation plans, reduce fertilizer usage, or consider shrinking planting areas to mitigate risks.

In response to price pressure, many companies have proactively ramped up production to ensure market supply. Some DAP plants have operated above designed capacity, raising output from around 60,000 tons to over 100,000 tons in the first quarter of 2026. Phosphate and NPK producers have also moderated price increases to levels below the rise in input costs to help ease the burden on farmers.

Although Vietnam’s domestic fertilizer market in 2026 is not facing a supply shortage thanks to local production, persistently high global fertilizer prices and rising import costs for raw materials are putting significant pressure on domestic prices. This is increasing agricultural production costs, affecting farmers’ profitability, and restraining overall market demand in the coming period.