Fertilizer Market – Growth, Trends, Covid-19 Impact, And Forecasts (2021 – 2026)

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Fertilizer market is projected to register a CAGR of 2.1 % during the forecast period 2021-2026. Since the COVID-19 outbreak, the fertilizer industry has been significantly affected in many parts of the world from the outset of the pandemic. Due to the shortage of labor and the shutdown of a few fertilizer plants located in the integrated chemical complexes, shipments were affected in the initial lockdown process. China, being the epicenter of the pandemic and was greatly impacted in the beginning. However, the conditions in the country are stabilized and production rates have increased for all fertilizers. Hence, the overall effect of COVID-19 on the fertilizer industry is observed to be moderate.

Asia-Pacific is the largest fertilizer market and accounts for a share of around 60.0% of the overall market. China is the largest consumer of fertilizers in the Asia-Pacific region and represented around 53.0% share in the Asia-Pacific fertilizer market in 2019.

Over the long term, the technological innovations in the industry, coupled with the growing demand for N, P, & K and micronutrient fertilizers, are expected ...
... to drive market growth. However, regulatory and environmental constraints and high production cost are likely to act as drawbacks in the industry.

Key Market Trends

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Decreasing Per Capita Arable Land and Increasing Food Demand

The global population is increasing at a rapid rate. This growing population is adding to the food demand. Supplying food to this growing population has become a threat. On the other hand, arable land is declining, due to industrialization and urbanization. The FAO, revealed in The Resource Outlook to 2050, that at this time, more than 1.50 billion hectares of the globe's land surface (about 12%) is used for crop production. There is little scope for further expansion of agricultural land.

The global per capita land availability was around 0.22 ha in 2005, which reduced to 0.19 ha in 2016. As per several reports, the per capita arable land area will decline by 2050 to 0.18 ha in the world compared with 0.15 ha in developing and 0.42 ha in developed countries. Further, the global population of 7.4 billion in 2016 is projected to increase to 9.7 billion by 2050, with almost all increases occurring in developing countries. Thus, it is recommended that global food production be increased by 60.0% to 70.0% between 2005 and 2050. As a result of population expansion and a steady land degradation rate, the per capita land is expected to decrease, in the future. Thus, this has led to a situation, where there is pressure on the existing arable land to produce more food by using technologically advanced fertilizer in a sustainable way.

Asia – Pacific Dominates the Market

Asia-Pacific is the largest fertilizer market and accounts for a share of around 60.0% of the overall market. South-East Asia is the major fertilizer consumer in Asia-Pacific, with China representing approximately half of the consumption. The demand for nitrogenous fertilizers in Asia is recorded as strong. However, the market for potassium fertilizers is expected to grow significantly in the coming years. Demand in South-East Asia is expected to grow further with the increasing use of neem coated urea, upscaling of Direct Benefit Transfer to farmers, and rapid adoption of water-soluble fertilizers.

In Asia-Pacific region, rice is a big nitrogen-consuming crop. In 2017, rice production in Asia accounted for 35.0% of total fertilizer consumption. Oil palm, the second-largest consumer of fertilizer, accounts for 17.0% of total fertilizer consumption and 50.0% of potash consumption in Asia. Rice and oil palm production growths are expected to remain robust, driven by population and economic growths in the region.

Competitive Landscape

The fertilizer market is highly consolidated, and the major players constitute a large share, while the other fertilizer companies constitute a smaller part of the market share, based on overall fertilizer market revenue in 2020. The major players in the market are Yara International ASA, The Mosaic Company, Nutrien Limited, EuroChem Group, PhosAgro, K+S Aktiengesellschaft​, and Groupe OCP, among others.

The companies in the market are investing heavily in product development. For instance, in 2017, The Mosaic Company with its joint venture launched the first DAP fertilizer in Saudi Arabia. It provided a new source of phosphate rock and helped them to improve access to growing agricultural markets, most notably India.

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