Global Fertilizer Market Update:Vietnam Imports Surge, Big Chinese Potash Contract Signed, Huge Volatility in Middle East market

Vietnam’s Fertilizer Imports See Double-Digit Growth in Volume and Value in the First Four Months of 2025

In the first four months of 2025, Vietnam’s fertilizer imports experienced a notable increase in both volume and value. A total of 1.84 million tons were imported, with a total value exceeding USD 586.61 million — representing a year-on-year growth of 15.7% in volume and 16% in value. In April alone, Vietnam imported 498,219 tons of fertilizer, worth USD 158.61 million.

Key Fertilizer Import Markets for Vietnam (January–April 2025):

• China remained the largest source of fertilizer imports, supplying 769,990 tons, accounting for 41.8% of the total import volume. The total import value from China reached USD 192.82 million, representing 32.9% of the total import value.

• Russia ranked as the second-largest supplier, with 248,334 tons valued at USD 127.98 million.

• Laos took third place, exporting 153,356 tons to Vietnam, with a total value of USD 40.88 million.

China's 2025 Potash Contract Price Set at USD 346/ton

On June 12, China’s potash import negotiation team finalized the 2025 annual import contract with Food Security Supply Chain Co. Ltd. (Dubai), setting the price at USD 346/ton CFR.

Although this is USD 3/ton lower than the contract signed by India a week earlier, it represents a significant increase of USD 73/ton from the 2024 price of USD 273/ton — a 27% year-on-year rise. The sharp increase is driven by the following factors:

I. Global Potash Market Recovery Driven by Supply-Demand Imbalance

• Strong expectations of supply tightening:

Since Belarus proposed a coordinated 10–11% production cut with Russia in November 2024, international potash prices have begun trending upward. In 2025, Belarus and Russia continued to signal production cuts.

Additionally, U.S. and Canadian tariffs on Russian fertilizers may prompt the U.S. to import more Russian potash, squeezing other markets.

Meanwhile, rising extraction costs for major potash producers have further fueled concerns over tight supply.

• Rigid demand growth:

Ongoing global geopolitical tensions have heightened concerns over food security, prompting countries to increase potash reserves.

In 2024, China’s apparent consumption of potassium chloride reached 18.01 million tons (+7.7% YoY), with imports at 12.63 million tons, reflecting a 72% import dependency.

Brazil imported a record 14.06 million tons, while India, Malaysia, and Indonesia saw import increases of 15%, 20%, and 44% respectively.

Under the combined influence of tightening supply and robust demand — especially during the global planting season — potash prices have remained elevated.

II. China-India Pricing Linkage and Low Inventory Levels Support High Contract Prices

China and India’s long-term potash contract pricing typically references the Southeast Asian and Brazilian spot markets, with a historical spread of USD 5–10/ton. Hence, China’s contract price was expected to follow India’s, with a price gap of less than USD 3/ton falling within expectations.

At the time of India’s signing, port inventories had dropped to just 170,000 tons, and the agricultural peak season created urgent demand, pushing the price up to USD 349/ton.Although China’s signing was less urgent, by the first week of June 2025, China’s port inventories of potassium chloride had dropped to 1.903 million tons, down 4% month-on-month and 20.2% year-on-year.

After India finalized its contract, international suppliers faced reduced shipment pressure, making it difficult for China to negotiate a lower price. Furthermore, limited customs clearance of new border-trade supplies and insufficient bonded zone arrivals led to a strong restocking demand — setting the tone for China’s final contract price.

Egypt’s Fertilizer Production Suspended, Emergency Measures Underway

Israel’s major gas fields, Leviathan and Karish, have been shut down, leading to a significant reduction in natural gas exports to Egypt.

Due to the gas shortage, Egyptian fertilizer producers have been forced to halt operations.

In response, Egypt’s Ministry of Petroleum launched an emergency plan to prioritize gas allocation. Power plants have been instructed to maximize the use of fuel oil and switch to diesel to stabilize the gas network and prevent power outages. However, no timeline has been given for the resumption of supply.

Background and Impact

• Of Israel’s three major gas fields, Leviathan and Karish have been closed, while Tamar remains operational. The Israeli Ministry of Energy stated that the gas supply disruption has led to a temporary suspension of exports, and all efforts are being made to restore supply.

• Since Egypt’s domestic natural gas production began declining in 2022, the country has become heavily dependent on Israeli imports. Israeli gas accounts for 40%–60% of Egypt’s total gas imports and 15%–20% of its total gas consumption.

Egypt’s Emergency and Long-Term Response Measures

• Short-term energy reallocation: Egypt’s Minister of Petroleum stated that gas transport contracts have been signed, fuel oil has been stockpiled, and efforts to bring Floating Storage Regasification Units (FSRUs) online are being accelerated.

• Large-scale LNG procurement: This week, Egypt signed agreements with energy firms to purchase at least 150 LNG cargoes, with a total value exceeding USD 8 billion — marking the largest LNG import deal in the country’s history.

• Strategic coordination: Egyptian Prime Minister Mostafa Madbouly emphasized close monitoring of the regional situation, plans to increase strategic reserves of essential goods, and convened high-level meetings with energy officials and the central bank to coordinate further actions.

Israel–Iran Tensions Ripple Across Global Nitrogen Fertilizer Market

The escalating Israel–Iran tensions has triggered chain reactions across the global nitrogen fertilizer market. As the Middle East is home to key producers like Iran and Egypt, the current instability has raised concerns over the reliability of agricultural input supply chains.

I. Direct Impact of the Israel–Iran Tensions on the Nitrogen Supply Chain

• Production Disruptions:

  Reduced natural gas output from Israel has led to a halt in urea production in Egypt due to gas shortages. Iran’s nitrogen output has also declined amid geopolitical uncertainty, with some suppliers temporarily suspending quotations due to the unclear situation.

  
  

• Price Volatility:

  As of June 13, ongoing tensions have driven up urea futures in the U.S., Middle East, and Brazil. The market has interpreted the event as a bullish signal.

II. Combined Pressure from Shipping and Energy Costs

• Oil Price Surge:

  Rising oil prices fueled by geopolitical risks are expected to increase both maritime and overland freight costs, adding further pressure to fertilizer import prices.

III. Brazil's Fertilizer Market on High Alert Amid Exposure Risks

• Import Dependency Crisis:

  Roughly 17% of Brazil’s urea imports come from Iran. With the country heavily reliant on imported urea over the past year, the tension poses a direct threat. Iran produces approximately 9 million tons of urea annually and exports 4.5–5.5 million tons, making it a key player in regional trade. Any cost escalation will have a direct impact on Brazil, which is highly dependent on nitrogen imports.

• Rising Input Costs for Farmers:

  Brazil is currently in the fertilizer procurement phase for its September summer planting season. The situation in the Middle East directly affects production costs for Brazilian farmers. As global fertilizer prices surge without a corresponding rise in agricultural commodity prices, local farmers face a worsening market environment.

Philippines Activates Contingency Measures to Mitigate Fertilizer Market Risks from Middle East Tensions

The President of the Philippines has ordered close monitoring of the escalating situation between Iran and Israel. If the country’s fertilizer supply or prices are impacted by the tension, the Department of Agriculture will begin seeking alternative import channels.

Risk Background and Import Dependency

• 66% of the Philippines’ nitrogen fertilizer supply is imported, with Qatar being one of the key suppliers.

  If shipping through the Gulf is disrupted due to the Middle East tensions, fertilizer prices are expected to come under upward pressure.

Emergency Response Measures

• The Department of Agriculture is fully prepared and has announced plans to source fertilizer from other countries, including Brunei, in case of supply constraints — ensuring stable access to agricultural inputs.

Egypt’s Chemical Exports Rise 18% in First Four Months of 2025

According to the Egyptian Chemicals and Fertilizers Export Council, Egypt’s chemical industry exports reached USD 3.14 billion in the first four months of 2025, marking an 18% year-on-year increase compared to USD 2.73 billion in the same period of 2024. Fertilizer exports stood out, contributing USD 961 million, accounting for 30.6% of total industry export revenue.

Export Structure and Regional Distribution

• By Category:

  Fertilizers topped the list with USD 961 million in export revenue, followed by plastics and polymers (USD 723 million). Petrochemical products ranked third at USD 602 million, but posted the fastest year-on-year growth at 58% among all categories.

  
  

• By Market:

  Turkey was the top importer with USD 437 million, followed by Italy (USD 396 million), Spain (USD 187 million), and Brazil (USD 184 million).

  
  

  Regionally, the European Union accounted for 42% of total exports, Arab countries 22%, and Asian markets 16%.

  
  

Industry Resilience and Future Outlook

• The Chairman of the Chemicals and Fertilizers Export Council highlighted the data as a testament to the sector’s resilience amid global economic and geopolitical challenges. He emphasized the need to enhance product competitiveness and accelerate expansion into emerging markets such as Africa and Latin America.

  
  

  A new export rebate program set to launch in the second half of 2025 is expected to boost total annual exports beyond USD 9 billion.

  
  

• The Executive Director noted that despite disruptions from regional tensions and global headwinds affecting fertilizer and petrochemical production, the sector’s strong Q1 performance demonstrates the global competitiveness of Egyptian products.

  
  

  He stressed the importance of developing industrial value chains and specialized industries to further strengthen export capacity.

Global Fertilizer Markets Face Disruptions

In the first half of 2025, the global fertilizer market has been significantly impacted by escalating geopolitical tensions and evolving supply-demand dynamics.

Vietnam recorded a sharp rise in fertilizer imports, with China remaining its top supplier.

China’s potash contract price surged 27% year-on-year, reflecting tight global supply.

The Israel-Iran tension disrupted natural gas flows, halting Egypt’s fertilizer production and triggering precautionary measures in countries like Brazil and the Philippines, both of which are heavily import-dependent.

Meanwhile, Egypt reported an 18% increase in chemical exports—driven in large part by fertilizers—despite regional uncertainties.

Across all fronts, governments and industries are mobilizing to stabilize domestic supply chains and manage rising input costs, underscoring the strategic importance of fertilizer security in global agriculture.

Attention: The above information is for commercial reference only due to the diversity of information collected, and Kelewell is not responsible for the authenticity of the data.