Fertilizer Sector – Sow right, reap bright
Posted: Dec 26, 2025
- Amid abundant global supply, bolstered by additional fertilizer production from the Middle East, Latin America, and Russia, and moderate demand recovery primarily from South Asia, Southeast Asia, and South America, global urea prices are expected to remain largely stable, with the base-case scenario ranging around USD 400–450/ton in 2026, similar to 2025 levels.
- The domestic fertilizer sector is set to enter 2026 on a relatively positive note, as continued demand growth is supported by stable agricultural commodity prices. The 5% output VAT policy, officially effective from mid-2025, is expected to further enhance the competitiveness of local producers in 2026. Demand for urea fertilizer is expected to remain stable, although it may face volatility due to unpredictable natural gas prices. Meanwhile, organic fertilizers hold an advantage in controlling input costs, helping producers maintain steady profit margins.
- We forecast moderate growth of 2–3% in revenue and profits for domestic fertilizer companies in 2026, driven by favorable price conditions and expansion in both domestic crop cultivation and export markets.
- Among domestic players, DCM is our preferred investment for 2026, supported by its strategy to expand market reach while boosting revenue in the NPK segment, thereby diversifying income sources and reducing reliance on urea fertilizer
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