Vietnam’s Fertilizer Trade in 2025: Strong Growth, Regional Puzzles, and the Need for Transparency

Fertilizer Trade Surges Amid Rising Agricultural Demand

Vietnam’s fertilizer sector is experiencing a period of strong growth. In the first eight months of 2025, import and export activities rose sharply—driven by favorable agricultural cycles, improved supply chain coordination, and growing demand in neighboring markets.

According to customs data, Vietnam exported 1.50 million tons of fertilizers worth USD 624.1 million, an increase of 28.8% in volume and 30.3% in value compared to the same period in 2024. At the same time, the country imported 4.34 million tons, valued at USD 1.51 billion, up 24.6% in volume and 32.0% in value.

This dual growth—strong outbound trade and stronger inbound dependence—reflects Vietnam’s role as a rising regional player and its continued reliance on external supply. Yet behind the positive numbers lies a web of intriguing questions, especially concerning trade with neighboring countries such as Cambodia and Laos.

Cambodia: Vietnam’s Top Fertilizer Buyer, But Why?

Cambodia emerged as the largest export destination for Vietnamese fertilizer, accounting for over 32% of total export volume. In the first eight months of 2025, Cambodia imported 489,212 tons worth USD 195.2 million from Vietnam—a significant increase of 32.7% in volume and 27.5% in value compared to 2024.

While Cambodia has a growing agricultural sector and porous cross-border trade ties with Vietnam, the magnitude of this export volume raises questions. For context:

• Cambodia's population is less than one-fifth of Vietnam’s.
• Its total agricultural land is also much smaller.
• Yet it receives one-third of Vietnam’s fertilizer exports.

This prompts us to ask:

Is Cambodia consuming all this fertilizer or is part of it being re-exported elsewhere?

There is no direct evidence of transshipment, but some fertilizer exported to Cambodia may re-enter Vietnam or move on to third countries through informal or tax-advantaged routes. Such possibilities call for better customs coordination between the two countries to ensure trade flows reflect actual end-use demand rather than tax structuring.

Laos: A Two-Way Fertilizer Corridor

Vietnam’s fertilizer relationship with Laos presents an even more curious case. In the first eight months of 2025, Vietnam exported 48,603 tons of fertilizer to Laos while importing 277,226 tons from Laos, worth USD 80.6 million.

This two-way flow of the same commodity between neighboring countries is unusual. Unlike countries that trade upstream and downstream products (e.g., oil vs. refined fuel), fertilizers imported from Laos and exported back to Laos are often of similar grade.

Why would Vietnam import large volumes of fertilizer from Laos, only to export it back to the same country?

Several possible explanations exist:

1. Transit trade: Some fertilizer imported from Laos may originate from China and enter Vietnam via Laos to benefit from lower border controls or tax preferences.
2. Circular trading: Companies operating on both sides of the border might use loop trading to optimize tax liabilities, take advantage of subsidies, or balance trade records.
3. Blending or repackaging: Fertilizers may be imported in bulk from Laos and then reprocessed or blended in Vietnam for re-export to Laos or elsewhere.

None of these practices is inherently illegal, but they highlight the lack of transparency and potential inefficiencies in cross-border trade monitoring.

Vietnam’s Top Fertilizer Importers

Despite growing exports, Vietnam remains heavily dependent on imports. Fertilizer imports accounted for nearly three times the country’s export volume. This highlights the need to strengthen domestic production and secure stable supply chains.

The top fertilizer-importing companies in Vietnam during the first seven months of 2025 included:

These companies serve as intermediaries between international suppliers and Vietnamese farmers. Some are also engaged in import and export, further blurring the lines between domestic demand and international arbitrage.

Where Fertilizers Come From: Strategic Suppliers

Vietnam’s top three fertilizer suppliers continue to be:

• China: 1.97 million tons, USD 679.9 million
• Russia: 585,268 tons, USD 266.6 million
• Laos: 277,226 tons, USD 80.6 million

China accounts for over 45% of Vietnam’s fertilizer imports. Despite global geopolitical tensions, Russian supply to Vietnam remained robust, likely supported by discounted pricing and favorable shipping terms.

Laos is the third-largest supplier, adding more intrigue to the import-export loop described earlier. With border access to China and Vietnam, Laos may serve as a transit hub rather than a producer, raising questions about the origin of fertilizers crossing into Vietnam.

Price Trends and Policy Effects

Fertilizer prices in global markets were mixed in August 2025. Key movements included:

• Increases:
  • MAP: USD 895/ton
  • DAP: USD 825/ton
  • UAN28: USD 421/ton
• Decreases:
  • Urea: USD 642/ton
  • Anhydrous: USD 762/ton
  • UAN32: USD 489/ton

Domestic prices followed global trends, but with greater regional variance. In the Central Highlands and Southeast regions, Urea prices reached 1.2–1.5 million VND per 50kg bag, nearly double the average in northern provinces.

The 5% VAT policy implemented on July 1st, 2025, added pressure to prices. This led many importers to stockpile in Q2, causing inflated import volumes before the policy took effect. As a result, Q3 import activity is expected to decline due to high inventory levels and softer demand.

Risks and Opportunities Ahead

Risks:

• Overstocking and cash flow strain for importers who bought in bulk ahead of VAT changes.
• Exchange rate fluctuations (USD/VND) are affecting profit margins.
• Geopolitical risks (Russia sanctions, China trade friction) disrupt fertilizer supply lines.
• Non-transparent cross-border flows may distort market signals or encourage regulatory arbitrage.

Opportunities:

• Strengthening exports to stable markets like Japan, the Philippines, and Cambodia (with oversight).
• Domestic production scale-up—especially by PVFCCo and Ca Mau—to reduce import dependency.
• Digital traceability of cross-border trade to ensure compliance and reduce tax manipulation.
• Product innovation: Organic fertilizers and climate-smart blends for high-value crops.

Conclusion: A Growing Sector, But Greater Clarity Needed

Vietnam’s fertilizer trade is expanding in both scope and scale. The country is becoming a regional exporter while maintaining key supply chains with China and Russia. However, the unusually high export volume to Cambodia and the two-way flows with Laos raise valid concerns about tax strategies, trade-based price manipulation, or regulatory blind spots.

To ensure fair trade and market integrity, Vietnam should invest in:

• Greater customs transparency
• Cross-border audit coordination
• Smart trade data platforms

In doing so, the country can not only maintain its growth trajectory but also build a fertilizer market that is sustainable, efficient, and equitable—both for domestic farmers and regional trade partners.