ANNUAL REPORT: PVCFC

PROSPECTS FOR

FERTILIZER INDUSTRY IN 2024

WORLD FERTILIZER MARKET

UREA MARKET

The global urea production capacity in 2024 is estimated to reach 237.232 million tons, continuing the upward trend compared to 2023.

Southeast Asia maintains a stable supply at 17.151 million tons. South Asia increases to 40.163 million tons; East Asia increases to 77.098 million tons, while Africa increases to 17.025 million tons.

The global urea consumption demand in 2024 is estimated to reach 189 million tons, showing a slight increase compared to 2023, with approximately 146 million tons projected for direct fertilizer usage.

The forecasted annual growth in demand, estimated at around 2.2 million tons per year during the same period (including both fertilizers and industrial urea), is lower than the growth rate of supply (capacity), at approximately 6.3 million tons per year. This indicates a more intense competition in the future for the urea market.

Asia will remain the largest market for direct urea usage and is expected to dominate growth in total volume over the next two decades, albeit with a forecasted modest growth rate of only 0.7% per year, with the largest volume increase anticipated in South Asia. China's growth rate is slowing down due to market saturation coupled with government interventions.

A strong growth forecast is expected in Latin America and Africa, the regions with the most potential for agricultural development.

EXPECTED CAPACITY OF WORLD UREA PLANTS IN 2024

237.2

MILLION TONS

EXPECTED CONSUMPTION DEMAND

189

MILLION TONS

WORLD DAP MARKET

The global demand for DAP in 2024 is forecasted to be around 73-76 million tons, showing a slight increase compared to last year due to the projected prospects of seasonal conditions and expanded agricultural cultivation areas worldwide. Furthermore, the continuous decrease in DAP prices has contributed to stimulating consumer demand for DAP, while the prices of some major agricultural products such as corn and soybeans remain attractive compared to DAP prices for farmers in key consumption markets.

Overall, the demand is expected to continue improving in major markets such as Brazil, Argentina, North America, and Asia, while consumption levels in India and China are somewhat slower compared to the rest of the world.

FORECASTED GLOBAL DAP DEMAND IN 2024

73-76

million tons

WORLD POTASH MARKET

Global potash consumption is expected to see significant improvement in 2024, reaching an estimated 68-72 million tons. Major consumer markets are maintaining their growth momentum, notably Latin America (15-16 million tons), China (14-16 million tons), North America (8.5-9.5 million tons), India (2.6-3.2 million tons), and other Asian countries (8.5-9.2 million tons), etc.

FORECASTED GLOBAL POTASH DEMAND IN 2024

68-72

million tons

DOMESTIC FERTILIZER MARKET

VIETNAM UREA MARKET

In 2024, urea demand in Vietnam is forecasted to recover after facing two years of price turbulence. However, this growth is expected to be moderate due to high urea prices in the first half of 2023. AgroMonitor predicts domestic urea consumption in Vietnam in 2024 to be in the range of 2.05-2.11 million tons, an increase from 1.74-1.93 million tons in 2022-2023.

Vietnam's urea exports in 2024 are forecasted to see slight growth or stability compared to 2023, as global nitrogen supply is expected to increase. The Asian region is expected to witness increased production from new urea plants, particularly in India and Bangladesh, which could introduce additional competition for Vietnam, although the Cambodian market still holds export potential. Vietnam's urea exports in 2024 are estimated to be in the range of 550-570 thousand tons.

Domestic urea supply is projected to reach 2.2-2.4 million tons. Forecasted urea imports in 2024 are lower than in 2023, estimated at 200-250 thousand tons, reflecting a slowdown after a lively year and depending on competition from domestic production and pricing policies.

FORECASTED DOMESTIC UREA CONSUMPTION IN 2024

2,05 - 2,11

MILLION TONS

VIETNAM DAP MARKET

In 2024, it is forecasted that DAP imports to Vietnam may increase compared to 2023, with the potential for a strong recovery in the latter half of the year due to factors such as China's export policies and developments in the Red Sea region. It is estimated that DAP imports will reach 440-460 thousand tons. China, being the largest supplier, is expected to limit exports in the first quarter but increase them after the spring season. Russia, another important source, will continue to impose export taxes, with shipping costs expected to rise due to tensions in the Red Sea. South Korea, although the third-largest market, still faces issues with high Cadmium content in the product.

Regarding demand, the world DAP prices are expected to increase in the first quarter of 2024 but decrease thereafter, supporting domestic DAP consumption, particularly in the early second quarter as the Spring-Summer crop season begins. Global demand for P₂0₅-containing fertilizers is also expected to increase slightly, with increases anticipated in East Asia, South Asia, and West Asia. Domestic DAP consumption is projected to rise to 620-660 thousand tons, compared to 530 thousand tons in 2023.

Domestic DAP production is expected to increase, with plants adjusting production according to supply demand dynamics and price trends. The estimated production volume is 400-420 thousand tons, an increase from 362 thousand tons in 2023.

ESTIMATED DOMESTIC DAP PRODUCTION IN 2024

400 - 420

THOUSAND TONS

VIETNAM POTASH MARKET

The outlook for the potash supply in Vietnam in 2024 is expected to be influenced by global supply and potash pricing trends. The potash price is forecasted to stabilize after a downward trend from late 2023 to early 2024, moving closer to pre-energy crisis levels. AgroMonitor predicts that potash domestic consumption for crops and production materials will increase, with estimated consumption reaching 250-300 thousand tons for crops and 500-550 thousand tons for production materials.

The production volume of MOP in Laos, with planned production expansions, is expected to increase the supply to the Southeast Asian market and impact regional trade flows. This could create price pressure and competition with other suppliers. It is anticipated that Vietnam's potash imports in 2024 will rise to the range of 800-850 thousand tons, reflecting increased imports from Laos and the potential decrease in imports from countries such as Russia, Canada, Israel, Belarus, and Uzbekistan due to geopolitical issues and possible increases in transportation costs.

EXPECTED POTASH CONSUMPTION IN 2024 FOR CROPS

250 - 300

THOUSAND TONS

VIETNAM NPK FERTILIZER MARKET

In 2024, both consumption and production of NPK fertilizers in Vietnam are forecasted to increase. Consumption is expected to grow by 11-15% to reach 2.9-3 million tons, while production is projected to increase by 1-3% to reach 2.63-2.65 million tons. Specifically, production volumes of NPK Ca Mau and NPK Phu My are expected to rise.

Regarding imports, it is anticipated that they will either remain stable or experience a slight decrease compared to 2023, with the main sources being China and Russia. The forecast for NPK fertilizer imports in 2024 is 500-550 thousand tons, a reduction from 548 thousand tons in 2023, continuing the trend of product diversification and distribution of imported goods.

The forecast for NPK fertilizer imports in 2024

500 - 550

THOUSAND TONS