Fertilizers in Vietnam 2014

        Fertilizer was first introduced in Vietnam in the 1960s with the creation of three fertilizer factories that had a combined capacity of 130,000 MT/year, but output was only 38 percent of total capacity. As a result, most fertilizer demand was met by imports, which were untaxed. The economic reforms of the 1980s led to the restructuring of the fertilizer sector, but the fertilizer supply remained under government control. From 1991 to 2000 the fertilizer sector was partially liberalized with laws encouraging domestic investment, but the government continued to control fertilizer pricing and supply and held majority shares of liberalized SOEs. This allowed the government to keep the price of fertilizer low to support farmers, but discouraged private sector investment in the sector. Production capacity did not improve and 80-90 percent of urea continued to be imported from China. 

       Since 2001 Vietnam’s fertilizer production has grown tremendously and is more linked to international markets as a result of the relaxed control of fertilizers prices. In 2010, the government established a scheme to industrialize and modernize the fertilizer industry by promoting the establishment and upgrade of fertilizer factories. The government also plans to construct 22 regional distribution centers, each with a capacity over 30-35,000 MT.  Although there has been some liberalization, most fertilizer is produced by a small number of SOEs and all urea and NPK fertilizers are subject to a government monitoring and stabilization program.