Fertilizer rally: Who’s really winning the upcycle?

Escalating geopolitical tensions in the Middle East have sharply disrupted global fertilizer markets, pushing prices higher after a period of decline. However, the extent of gains has varied significantly across industry players.

Internationally, urea prices have surged as much as 50% over the past month. In Vietnam, by contrast, urea and DAP prices have risen only modestly, by around 10-13% from the previous month, according to a report by major broker Saigon-Hanoi Securities JSC (SHS). The divergence reflects a lag in domestic pricing versus global benchmarks, while also creating a wide price gap between the two markets.

Against this backdrop, exports are emerging as a key growth driver for the industry. Vietnam customs statistics show that in the first two months of 2026, fertilizer exports reached nearly 449,319 tons, equivalent to $186.58 million, with an average price of $415.3 per ton. Compared with the same period last year, export volume rose 34.5%, value increased 38.8%, and prices edged up 3.2%.

Producers gain from export momentum

Producers with strong upstream advantages are capitalizing on a period of elevated global fertilizer prices to ramp up exports.

Petrovietnam Fertilizer and Chemicals Corporation (DPM) said that despite sharp fluctuations in global prices, the domestic market has remained stable, with prices kept at reasonable levels thanks to local production capacity now exceeding demand.

Output has also surged following the completion of maintenance at the Phu My fertilizer plant in Ho Chi Minh City, currently running more than 25% above its Q1 plan. The surplus production is being redirected to exports to take advantage of the price gap between domestic and international markets.

According to its 2025 financial report, DPM’s export segment recorded revenue of VND1.62 trillion ($61.51 million) against cost of goods sold of VND1.18 trillion ($44.8 million), implying a gross margin of about 27% which is nearly 12 percentage points higher than a year earlier. This is significantly higher than the 17% gross margin in the domestic market.

Similarly, Petrovietnam Ca Mau Fertilizer JSC (DCM) is operating its plant above designed capacity, thereby increasing export volumes to Southeast Asian markets. The company’s domestic and export gross margins are currently broadly comparable, both at around 23-25%. However, export profitability has improved markedly from below 10% last year. In the first two months of this year, DCM exported 109,200 tons of urea, reaching 40% of its full-year plan.

DAP – Vinachem JSC (DDV), a key fertilizer producer in Vietnam, has also reported a marked improvement in performance. In 2025, its export revenue rose to VND2.91 trillion ($110.49 million), exceeding domestic revenue of VND2.71 trillion ($102.9 million). The company’s export gross margin grew to 17.6%, up from around 8.6% in the previous year.

This underscores that producers with stronger control over input materials are effectively capitalizing on the global fertilizer price upcycle. This year, amid a sharp rise in global fertilizer prices and higher production output, DCM, DPM and DDV are expected to see export profitability improve both in volume and margins.

Binh Dien Fertilizer JSC: export growth, margins under pressure

In contrast to peers, Binh Dien Fertilizer JSC (BFC) is facing rising input cost pressures and volatile domestic demand.

In 2025, BFC’s export revenue surged 41% to more than VND2 trillion ($75.94 million), accounting for nearly 19% of total revenue. However, export gross margin declined to 6.7% from 8.6%, significantly below the roughly 14% in the domestic market.

This suggests that the company’s export activities are primarily aimed at expanding volume rather than optimizing profitability. The domestic market therefore remains its key growth driver.

Unlike DPM and DCM, which can partially secure their own input materials, Binh Dien relies heavily on key raw materials such as urea, DAP and, in particular, potash - which must be fully imported. This exposes production costs to fluctuations in global prices.

At the beginning of 2025, BFC still held inventory purchased at earlier prices, including key raw materials such as urea and DAP, worth around VND1.6 trillion ($60.75 million). This helped the company avoid immediate increases in input costs. However, the stockpile is only sufficient for production over a limited period.

Deputy CEO Phan Van Tam said the company had kept fertilizer prices unchanged as of March 25, 2026, in line with end-2025 levels. However, from March 26, as the earlier inventory is depleted, BFC has switched to new input materials, with prices up by around 5-10%.

The increase in NPK fertilizer prices is expected to weigh on BFC’s domestic revenue. Against a backdrop of stagnant agricultural commodity prices, farmers are likely to tighten spending.

In addition, the domestic market is heavily influenced by seasonality and weather conditions, resulting in unstable consumption demand.

According to the Department of Agriculture and Environment of Bac Ninh province, northern Vietnam, dubbed Vietnam’s lychee kingdom, lychee output this year is projected to fall by around 50% year-on-year, driven by unusually high temperatures in the final months of 2025.

A local fertilizer distributor said farmers are only applying fertilizers to crops with high flowering and fruit-setting rates, while trees that do not flower or flower sparsely are almost completely left unfertilized. As a result, fertilizer demand could decline sharply, potentially falling even more than the drop in lychee output.

The current developments indicate that although fertilizer prices are on an upward trend, the benefits are not evenly distributed among companies.

Companies more dependent on external raw material supply like BFC are seeing export revenue growth but remain under cost pressure, limiting improvements in profitability.

However, it should be noted that fertilizer price increases driven by geopolitical factors are typically short-lived and hard to predict. If global supply conditions improve, price levels could adjust quickly, potentially weighing on the industry’s earnings outlook.