Global Fertilizer Market Updates: New Developments in Policy, Projects, and Trade Structures of Russia, Iraq, Japan and Vietnam

EU Increases Tariffs on Russian Fertilizers: Intensifying Industry Tensions

The European legislative body has approved new tariffs on fertilizer imports from Russia, aiming to reduce related financial support. Currently, over one-quarter of the EU’s nitrogen fertilizer imports come from Russia (worth €1.3 billion), with additional volumes from Belarus.

• Tariff Escalation Plan: Starting in July, tariffs on certain fertilizers will gradually increase from 6.5% to 100% over three years. From mid-2026, an additional levy of €40–45/ton ($45–50) will be introduced and increase annually, reaching €350–430/ton ($395–486) by 2028, significantly raising import costs.

• Debates and Impacts:

  • In 2023, the EU imported 4.4 million tons of fertilizer from Russia and Belarus (30% of total imports). The measure still requires formal member-state approval, but has already received broad support.

  • Concerns from Agriculture: EU farming groups fear soaring costs. The EU farmers’ association warned that Russian fertilizers, due to logistical advantages, are currently the lowest-cost option. New tariffs could become a "destructive burden." A Belgian farmer remarked they are being used as "pawns," facing direct financial losses.

  • Industrial Support: The EU aims to limit indirect Russian gas exports (natural gas is a key fertilizer input) and promote domestic production. Manufacturers welcome the move. Norway’s Yara stated that "action is urgent," while acknowledging farmers' concerns are valid.

• Buffer Measures: To ease price shocks, the EU proposes removing tariffs on fertilizers from countries like North Africa and Central Asia. The new tariffs are estimated to raise fertilizer prices by $5–10/ton (current nitrogen fertilizers are about $400/ton).

Iraq and China Partner on $2 Billion Phosphate Fertilizer Project

On Thursday, a new integrated phosphate fertilizer facility broke ground in Iraq’s western Anbar province, marking the revival of a key industrial operation after years of stagnation and damage from terrorism. The project is a collaboration between Iraq’s State Company for Phosphate and East China Engineering Science and Technology Co., Ltd. (ECEC), with a total investment of $2 billion. The plant will have a production capacity of 500,000 tons of SSP (single superphosphate) and 1 million tons of DAP (diammonium phosphate) annually. This project initiates a broader investment plan to develop mineral resources in western Anbar, which holds an estimated 10 billion tons of phosphate reserves. A silica dioxide production project will follow.

Japan Fertilizer Market: Multi-Faceted Trends in Consumption, Production, Imports, and Exports

1. Market Demand: Long-Term Growth Outlook

• Consumption Trends: Driven by demand, Japan’s fertilizer consumption is expected to grow at a compound annual growth rate (CAGR) of +0.6% from 2024 to 2035, reaching 8.2 million tons by 2035. Market value is projected to grow at +1.7% CAGR, reaching $8.2 billion (based on nominal wholesale prices).

• Recent Data: Consumption in 2024 slightly declined to 7.7 million tons (flat compared to 2023). A historical peak of 8.3 million tons was reached in 2019, followed by a mild decline through 2024.

• Product Structure:

  • Calcium Ammonium Nitrate (CAN): Largest share at 2.9 million tons (38%), double the second-largest category of nitrogen fertilizers (1.4 million tons).

  • NPK Compound Fertilizers: Third largest at 1 million tons (14%).

2. Domestic Production: Stable Volume, Concentrated Structure

• Production Trends: Fertilizer production in 2024 slightly declined to 6.7 million tons, nearly unchanged year-over-year. The historical peak was 7.2 million tons in 2013; production has remained lower since 2014.

• Product Distribution:

  • CAN: Accounts for 43% of production (2.9 million tons), double the output of the second-largest nitrogen category (1.4 million tons).

  • NPK Fertilizers: Account for 16% of production (1 million tons), ranking third.

3. Import Market: Rising Volumes, Falling Prices, Reliance on Key Suppliers

• Import Scale: In 2024, imports rose to 1.3 million tons (+6% YoY), though long-term trends show contraction. Import value fell to $698 million.

• Supply Breakdown:

  • Top Suppliers: China (444,000 tons, 71%), Canada (269,000 tons), and Malaysia (175,000 tons) together account for 71% of import volume. In value terms: China ($268 million), Canada ($163 million), Malaysia ($75 million) contribute 67% of total imports.

  • Main Products: Potassium chloride (342,000 tons), diammonium phosphate (325,000 tons), and urea (268,000 tons) account for 71% of imports.

• Price Volatility: Average import price in 2024 was $530/ton, down 13.1% from 2023.

4. Export Market: Rebound in Volume, Focus on Southeast Asia

• Export Trends: In 2024, Japan's fertilizer exports rose for the first time since 2021 to 390,000 tons, ending a two-year decline. However, this is still well below the 2013 peak of 711,000 tons. Export value reached $119 million.

• Key Destinations:

  • Top Export Markets: The Philippines (94,000 tons), Malaysia (85,000 tons), and Vietnam (79,000 tons) accounted for 66% of exports.

  • High-Value Markets: USA ($19 million), Vietnam ($14 million), and the Philippines ($13 million) made up 42% of total export value.

5. Market Summary

• Domestic Focus: Both consumption and production are heavily concentrated in core categories like CAN.

• Import Dependence: China, Canada, and Malaysia dominate supply; prices are vulnerable to global market fluctuations.

• Export Shrinkage: Southeast Asia remains the key market, but overall export volumes are significantly lower than historical highs, indicating shifting global competitiveness.

Vietnam Fertilizer Imports: Growth in April, China Remains Leading Supplier

According to Vietnam’s General Department of Customs, Vietnam’s fertilizer import market in April 2025 showed structural fluctuations, with China maintaining its lead and Russian volumes rising sharply.

1. Overall Import Growth

• Monthly Figures: In April, fertilizer imports reached $158.61 million, up 10.03% from March.

• Year-to-Date: From January to April, total imports amounted to $586.61 million, reflecting strong market demand.

2. Supplier Performance

1. China: Still the Top Supplier

   • April imports totaled $48.88 million, down 17.15% month-over-month, but still accounted for 32.87% of total year-to-date imports.

2. Russia: Sharp Import Increase

   • April imports from Russia surged to $44.55 million, a 74.82% increase from March, making it the second-largest source with 21.82% of year-to-date imports.

3. Other Market Trends:

   • Markets with Growth: South Korea (+46.96%), Laos (+14.01%), Indonesia (+566%), and Malaysia (+170.6%) all posted strong month-over-month gains.

   • Markets in Decline: Norway (-41.54%), Taiwan (-46.49%), Germany (-30.87%) saw reduced volumes. Canada’s imports ceased entirely in April.

3. Market Summary

• High Concentration: China and Russia together accounted for 54.69% of Vietnam’s fertilizer import value, dominating the supply structure.

• Regional Variability: Significant fluctuations in imports from Southeast and Northeast Asian countries reflect trends in supply diversification and the impact of regional trade policies.