Vietnam Fertilizer Export Tax Cut to 0%: DCM, DPM Seen as Biggest Winners

Overview

Vietnam’s Ministry of Finance has proposed cutting the export tax on urea, superphosphate and potassium sulphate (SOP) from 5% to 0%, a change that would flow directly to the net selling prices of the country’s fertilizer exporters. MBS assesses the policy as most positive for Đạm Cà Mau (DCM) and Petrovietnam Fertilizer (DPM), limited for LAS, neutral for DDV and potentially negative for BFC. The proposal still requires completion of the formal rule-making process, and no effective date has been confirmed.

Key Facts

• Proposed cut: export tax on urea, superphosphate and SOP from 5% to 0%, per the Ministry of Finance.
• DCM estimated annual tax saving of about VND 203B, equal to 9.2% of 2025 pre-tax profit, per MBS.
• DCM urea exports reached roughly 59.7% of volumes sold in the first eight months of 2026.
• DPM estimated annual saving of about VND 93B, equal to 6.9% of 2025 pre-tax profit; urea exports rose to about 36% of volumes in H1 2026.
• LAS operates superphosphate production and an SOP line of about 20,000 tonnes per year, but export scale is not yet material to consolidated profit.
• DDV’s main product is DAP, which is not among the three items proposed for the tax cut.
• BFC is focused on NPK and could face higher domestic input costs if urea is redirected to export.

What Happened

The Ministry of Finance has put forward a reduction in the export tax on urea, superphosphate and SOP from 5% to 0%, according to a sector note from MBS. The broker argues the cut would either lift net selling prices for exporters or improve their price competitiveness in international markets, supporting both margins and export volumes. It would also help absorb urea capacity that exceeds domestic demand, easing inventory pressure and reliance on the home market.

MBS stresses that the impact is uneven across listed producers. Companies with a high share of urea exports benefit most directly, while NPK producers could come under pressure if domestic urea prices rise as supply is redirected abroad. The broker describes the policy as a positive fundamental catalyst but cautions that stock appeal still depends on valuation, international fertilizer prices and the timing of implementation. DCM is flagged as the largest beneficiary, with DPM second; LAS gains are described as positive but limited, DDV as not directly benefiting, and BFC as potentially adversely affected.

Market Context

DCM, listed on HOSE, closed at VND 34,800 on 28 October 2026, with peer DPM at VND 21,300, LAS at VND 11,800 and DDV at VND 16,700. The fertilizer sector has been split between producers with export exposure and those oriented to domestic NPK and DAP sales. MBS notes that DCM already reported pre-tax profit for the first eight months of 2026 up more than 50% year on year, giving the tax proposal a stronger earnings base to work from.

Strategic Significance

The proposal matters less as a one-off margin boost and more as a structural shift in where Vietnamese urea is sold. With DCM exporting nearly 60% of volumes and DPM around 36%, a zero export tax widens the arbitrage between domestic and international prices and gives both producers a reason to run plants closer to capacity. The offsetting risk is that part of the benefit is passed to buyers through lower offer prices, and that weaker international urea prices could erode the gain. For NPK-focused BFC, the same mechanism works in reverse: a tighter domestic urea market raises input costs unless the increase can be passed through.

What to Watch

• The formal decree or circular confirming the 0% rate and its effective date.
• International urea, superphosphate and SOP price trends through the next quarter.
• DCM and DPM quarterly disclosures on export volumes and net selling prices.
• LAS commercial SOP volumes, to test whether the 20,000 tonne line becomes material.
• BFC gross margin commentary on domestic urea input costs.