Agriculture accounts for a significant portion of Southeast Asia's economy, and the fertilizer market is experiencing steady growth. The market size is projected to reach US$12.69 billion by 2029, with a compound annual growth rate of 4.20%. The current Southeast Asian fertilizer market is experiencing a surge in both supply and demand, but price trends are diverging due to policy adjustments, raw material fluctuations, and climatic factors.
Fertilizer Market: Price Divergence, Urea Under Pressure
1. Nitrogen Fertilizer Price Decline
International urea prices remain under pressure, and autumn fertilizer preparations are entering the latter half of many Southeast Asian regions, leading to a gradual weakening of market demand for replenishment. In countries like Vietnam, the main fertilization season ended in early August, and farmers are not expected to return to the market until October. This leads to a projected slowdown in fertilizer imports in the third quarter.
2. Phosphate Fertilizer Prices Remain High
China's FOB export price of diammonium phosphate rose from US$617/ton in January 2025 to US$703/ton in July, a year-on-year increase of 36.6%. Demand in the Southeast Asian market is strong, with Thailand and Vietnam as the main importers, accounting for 44.5% of China's DAP exports. The import price of DAP in Vietnam is approximately US$750 per ton, a 20% year-on-year increase.
3. Tight supply and demand balance for potash fertilizers
Southeast Asia relies on imports for over 80% of its potash fertilizers. From January to July 2025, Vietnam's potassium chloride imports increased by 16.2% year-on-year to 766,000 tons. The international potassium chloride price rose from US$320 per ton at the beginning of the year to US$349 per ton in August, primarily due to supply fluctuations from Canada and Belarus. Demand for potash fertilizers in Malaysia's main palm oil-producing regions is strong, with usage expected to increase by 5% to 800,000 tons in 2025.
Import and export policy adjustments
China's export restrictions: Total urea exports in 2025 are capped at 2.8 million tons, with availability limited to the May-September window. Vietnam and Malaysia are turning to the Middle East for sourcing, but transportation costs are increasing by US$15-20 per ton. Environmental protection and subsidy policies: Thailand and Vietnam provide a 30% subsidy for biofertilizers, with the market size projected to reach US$250 million and US$180 million, respectively, by 2025. Indonesia requires a 20% replacement rate for organic fertilizers in palm plantations by 2025, driving a 40% increase in China's biofertilizer exports.
