2023 marked a significant year of global urea market reaching approximately 190.4 million tons, up 4.1% as of 2022, the highest design capacity in 14 years. However, urea output was only slightly increased approximately 1% compared to previous year with a capacity of 157.9 million tons. The rise mainly came from the Asia region (China, Brunei, Indonesia, and India); Europe (Russia and Ukraine). In the meanwhile, some other regions such as West Asia and America witnessed a decline in output.

Especially, India and Bangladesh saw a start of new urea plants: India expects to put into operation six new urea plants with a capacity of 1.3 million tons per each year; Bangladesh has launched Southeast Asia’s largest urea plant with a capacity of 924,000 tons/year. China has put into operation 3 new urea plants since October 2023. Brunei and Indonesia recorded strong growth. Meanwhile, the Middle East excluding Egypt, saw a decline in production in Iran and Saudi Arabia. Europe, especially Russia and Ukraine, also witnessed a urea output growth thanks to recovery of manufacturing of urea plants after a period of difficulty due to high gas prices in previous year.

In 2023, global phosphate production capacity was forecast to reach 63.6 million tons of P205, up 3% as of previous year. The actual output was forecast to rise by 3% reaching 52.7 million tons of P205 thanks to recovery of manufacturing in Africa, South Asia and East Asia. By 2024, phosphate production capacity is forecasted to increase by 2% reaching 64.7 million tons of P205 and actual output is expected to increase by 3% reaching 54.4 million tons of P205.

Global potash production capacity was forecast to reach 64.3 million tons in 2023, up 2% as of 2022. Actual output reached approximately 48.5 million tons, up 4% as of previous year due to an increase in supply from Lao PDR and Canada plus operation of new plants and improved operational capacity. However, the output of some plants in Russia and Belarus reduced due to impacts of Russia - Ukraine conflict and sanctions imposed by the US and EU.

Lao DPR, Thailand, Vietnam and Canada emerged as spotlights in potash development and production expansion. Lao DPR has restarted producing MOP, Thailand has revived its potash mining product, Vietnam has planned to boost commercial production of MOP while Canada continued to pour capital into Jansen Potash project. However, Canada witnessed a production drop at Mosaic plant and closure of Potash mine due to high inventory. The U.S.A is expected to boost Potash sales. Belarus and Russia saw a decline in output due to sanctions and conflicts.

Global potash output reached

48.5

MILLION TONS

4%

compared to 2022

Global NPK fertilizer price saw a significant decrease from January to July 2023 due to buyers’ limited participation because they were uncertain about price trends, high inventory and a drop in single fertilize price. From August to December 2023, NPK fertilizer price slightly inched back in almost markets due to rising material price and high demand. This led to price of NPK 16-16-16 fertilizer in Southeast Asia dropped by 27% down to 522 USD/ton, NPK 15-15-15 fertilizer price in China dropped by 22% down to 554 USD/ton while the fertilizer price in Morocco falling by 32% down to 506 USD/ton.

In the first half of 2023, NPK fertilizer market turned its eyes to large bidders in India, many tenders failed because buyers did not accept the price. From January to July, the price of NPK 16-16-16 fertilizers in Southeast Asia fell by 31%, the price of NPK 10-26-26 fertilizer dropped by 32% in India. From January to July saw a limited supply due to export restrictions placed by Russia and China.

However, from August to December, the price of NPK fertilizer inched back due to high demand and rising material price. Especially, the demand in India, Southeast Asia and Europe increased. In the meanwhile, the supply from China decreased due to export restrictions plus limited supply from Russia. In December, the price of NPK 15-15-15 fertilizer in China rose by 3% up to 492 USD/ton, price of NPK 16-16-16 fertilizer in Southeast Asia rose by 7% up to 490 USD/ton.

According to AgroMonitor, Vietnam urea market saw an increase in supply and a slight decrease in total demand in 2023 causing a pressure on urea price. A decrease in global urea price in the first half of 2023 had impacts on consumer sentiment, most transactions were small scale due to caution from distributors. Total domestic and import supply combined with inventories were estimated at 2.95 million tons, up 2.35% as of previous year. Imported products increased significantly as an offsetting for a light decrease in production. Weak demand due to a sharp drop in export while domestic consumption slightly recovered in general.

Amount of urea inventories was higher than that of two previous years with an average inventory amount of over 400,000 tons compared to 300,000 tons in 2022 and 220,000 tons in 2021. The highest level of inventories was recorded in the last two months of 2023 because manufacturers and traders prepared products for the Winter-Spring crop. However, the Winter-Spring crop in 2023 was one month delayed compared to previous years, there was a supply surplus in the last two months causing a drop in urea price since a slight recovery recorded from August to October 2023.

According to AgroMonitor, 2023 saw an increase in both supply and demand of DAP in Vietnam compared to 2022. Total supply reached 953,000 tons, up 241,000 tons, imported products increased by 25% up to 438,000 tons, products imported from China rose by 97%. Domestic production also increased by 7.5%, lower than 2020-2021 due to scarcity of apatite ore.

Total demand of DAP in 2023 was estimated at 710,000 tons, up 150,000 tons, and exports rose by 50% up to 180,000 tons. Domestic consumption serving production and crop cultivation also increased.

However, due to excess supply, inventory increased by 59% at the end of 2023, inventory in the first 7 months of 2023 maintained at 99,000-152,000 tons and rose to 170,000-250,000 tons in the last 5 months due to an increase in import.

Potash market

According to AgroMonitor, Potash price in Vietnam 2023 dropped continuously but not returned to pre-crisis level in February 2021. Urea and DAP prices were almost equal to that level in June-July 2023. Potash transactions were quiet due to risks of falling price leading to limited purchase of distributors. Potash consumption for crops slightly increased by 5% while NPK consumption decreased by 15%. Total Potash demand fell by 17.3% compared to previous year, total supply also dropped by 3.8% mainly due to low inventories at the beginning of the year despite an increase of 25% in import in the last 5 months. The first 7 months of 2023 saw a decrease in potash inventories due to release of inventory at high price plus limited import. From August to October saw a gradual increase and reached the highest level of 252,000 tons at the end of October and maintained at 228,000-238,000 tons in November and December.

According to AgroMonitor, the Vietnamese NPK market saw a fluctuation in both supply and demand in 2023. Inventories decreased by 16% as of early 2022 with a capacity of 279,000 tons. Total NPK fertilizer production output enjoyed a slight increase of 1.36% to 2.63 million tons despite impacts of a decline in single fertilizer price faster than that of mixed fertilizers, this led to partial recovery of NPK fertilizer consumption. Production capacity of plants under Chemical Group dropped by 7% down to 1.05 million tons, other plants enjoyed an increase of 7.8% up to 1.58 million tons.

Imported NPK fertilizers significantly increased by 46.7% up to 548,000 tons, imported NPK fertilizers from China and Russia increased by 43% and 86% respectively. Average import price decreased compared to 2022 leading to high import output. Specifically, the imported NPK price from Russia was 508 USD/ton and 524 USD/ton from China, despite a decline in price compared to 2022 but still higher than that of 2021.