Market and product

Production capacity for some types of fertiliser in Vietnam now exceeds domestic demand, making exports an increasingly important channel for maintaining capacity and improving investment efficiency. As Cambodia—the largest traditional market—shows signs of slowing, Vietnamese enterprises are facing the requirement to expand markets and adapt their competitive approach.

Exports as a Channel for Capacity Balancing

Vietnam’s fertiliser exports surged in 2026. According to preliminary data from the General Department of Customs, from the start of the year to 15 August, Vietnam exported over 1.9 million tonnes of fertiliser, earning nearly USD 1.07 billion—up 38.2% in volume and 80.8% in value compared to the same period in 2025.

The average export price reached almost USD 542/tonne, an increase of about 30.8%. The faster rise in export value compared to volume indicates that this year’s exports have been significantly supported by global price levels. However, behind the USD 1 billion milestone lies a longer-term challenge: finding markets for the production capacity that has been developed domestically.

According to the Vietnam Fertiliser Association, domestic urea demand is about 1.8 million tonnes per year, while total production capacity is around 2.6 million tonnes per year, mainly from Phu My Fertiliser, Ca Mau Fertiliser, Ha Bac Nitrogenous Fertilizer and Ninh Binh Nitrogenous Fertilizer.

While domestic demand fluctuates with the seasons, large-scale production complexes require relatively stable operating rates to allocate fixed costs and improve asset utilisation. Thus, when domestic absorption is exceeded for certain products, exports become a vital channel to reduce inventories and sustain production.

Dr. Phùng Hà, Chairman of the Vietnam Fertiliser Association, notes that products such as urea and superphosphate have production capacity exceeding domestic demand, necessitating exports to maintain output. He also points out competitive disadvantages, as Vietnamese fertilisers are subject to export taxes while some competing countries are not.

However, this should not be taken to mean that the entire fertiliser sector is in surplus or that Vietnam is fully self-sufficient. Vietnam still has to import potash and many input materials.

In the first seven months of 2026, Vietnam imported about 2.38 million tonnes of fertiliser, worth USD 814.47 million, down 36.6% in volume and 36.8% in value year-on-year. China remains the largest supplier with over 976,000 tonnes, followed by Russia with over 344,000 tonnes.

Therefore, the sharp rise in exports alongside a fall in imports must be viewed by segment. Domestic supply has improved for some products, but the degree of dependence on external sources still varies significantly between fertilisers and raw materials.

Cambodia: Large, but Not Unlimited Potential

For many years, Cambodia has been a particularly important market for Vietnamese fertiliser. In 2025, Vietnam exported approximately 702,000 tonnes to Cambodia, worth USD 288 million—accounting for 35.6% of total volume and 34% of total export value.

In 2026, this market began to show signs of slowing. In the first seven months, exports to Cambodia reached 401,978 tonnes, worth around USD 177.4 million. Compared to the same period, volume decreased by 9.54%, but value still rose by 1.75% due to a 12.48% increase in average export price.

This suggests that higher prices are offsetting lower volumes, while raising questions about further growth potential in a market where Vietnamese products already have extensive coverage.

During a working visit by Cambodia’s Ministry of Agriculture, Forestry and Fisheries to An Giang on 28 August, Dr. Seng Vang, Director of the Department of Land and Fertiliser Management under the Cambodian General Directorate of Agriculture, noted that Vietnamese fertilisers account for up to 80% of the country’s fertiliser use.

Such strong presence is an advantage, but it also means that further growth through volume increases alone may not be as feasible as before.

According to Dr. Phùng Hà, Binh Dien was the first Vietnamese enterprise to enter the Cambodian market in 2002. After years of primarily exporting products, enterprises are now increasingly providing nutrition solutions tailored to local crops and conditions.

This shift demonstrates a change in competitive strategy. Once a market has high coverage, it is difficult to rely solely on price and volume. Product quality, crop-specific formulations, technical services, and distribution networks will increasingly determine the ability to maintain market share.

The challenge, therefore, is not to abandon Cambodia, but to consolidate traditional markets while developing new outlets large enough to reduce dependence.

Expanding the “Market Spectrum”

In practice, Vietnam’s fertiliser export map has started to broaden. In the first seven months of the year, Vietnam exported about 137,280 tonnes of fertiliser to the Philippines, earning nearly USD 73.92 million, up 112.78% in volume and 166.59% in value year-on-year. Exports to Myanmar also increased by 129.15% in volume and 154.5% in value, although from a relatively small base.

otably, Vietnam exported almost 158,970 tonnes to South Korea, worth USD 112.54 million, up 45.27% in volume and 150.26% in value. In July alone, the average export price to this market reached around USD 826/tonne, much higher than in many other markets.

These figures show that enterprises now have more options for market outlets. However, high growth rates in some markets should be viewed with caution, as they may partly result from a low comparative base.

Furthermore, 2026 has been a relatively favourable period for exporters, with high global fertiliser prices and supply disruptions internationally. Therefore, growth driven by market conditions must be distinguished from long-term competitiveness.

The real test will come when global prices cool, supply stabilises, and price competition intensifies. At that point, the ability to maintain market share will depend more on production costs, quality, branding, distribution networks, and the capacity to meet the specific standards of each market.

Thus, the challenge for Vietnamese fertiliser enterprises is not merely how many more tonnes they can export, but how many markets they can develop with stable absorption across multiple price cycles.

A “market spectrum” including Cambodia, the Philippines, Myanmar, South Korea, and other destinations will help spread risk more effectively. For new markets to become long-term pillars, enterprises must shift from selling products to building markets, developing distribution systems, and increasingly meeting requirements for quality, traceability, and the environment.

This is also the necessary shift for the fertiliser industry: from exporting surplus domestic output to proactively building long-term markets, thereby maintaining capacity and investment returns even when global prices are less favourable.