IndexBox has just published a new report: ‘EU – Mixed Nitrogen, Phosphorus And Potassium Fertilizers – Market Analysis, Forecast, Size, Trends, and Insights.’ Here is a summary of the report’s key findings.

In 2020, the NPK fertilizer consumption in the EU amounted to 12 million tonnes, or approx. $4.9B. Near 50% of the market is supplied by imports, which may include the mutual trade between the EU countries. Due to the pandemic, imports of fertilizers to the EU countries fell sharply in April-May 2020 but started to recover in July, maintaining this trend until the end of the year. Fertilizer demand is expected to grow further in 2021, should the pandemic wane gradually.

A new challenge to the fertilizer market may be introducing a carbon tax on imported products in the EU countries. As part of the Green Deal, the European Union plans to introduce, according to the baseline scenario until 2025, an additional tax on imported products, which will fail to meet the new EU standards in terms of greenhouse gas emissions.

The tax initiative is supported by European producers, who have been subject to the Emission Trading System (ETS) since 2005, paying the costs of complying with the emission requirements. The ETS system’s introduction helped reduce greenhouse gas emissions by 23% by 2018 compared to 1990 but weakened European products’ competitiveness compared to countries where the regulation is less strict.

Fertilizer producers may be the first to be hit by the new regulation. Due to high energy consumption, fertilizer manufacturing processes have a heavy carbon footprint, among others in the chemical industry. The introduction of the tax will affect all levels of the product value chain. Modern plants for the production of ammonia fertilizers, in terms of energy consumption, are close to the theoretical minimum, making further improvements difficult and costly. Both local and foreign producers will be forced to enter into serious price competition in the European sales market’s struggle.

Romania Emerges as the Fastest-Growing Importer of NPK Fertilizers in the EU

In 2019, Spain (825K tonnes), Poland (660K tonnes), Lithuania (583K tonnes), Germany (399K tonnes), Romania (374K tonnes), France (347K tonnes), Ireland (338K tonnes), Belgium (291K tonnes), Hungary (282K tonnes), Sweden (276K tonnes), Denmark (253K tonnes) and Latvia (219K tonnes) represented the major importer of mixed nitrogen, phosphorus, and potassium fertilizers in the European Union, generating 77% of total import (IndexBox estimates). Estonia (201K tonnes) followed a long way behind the leaders.

From 2012 to 2019, the most notable growth rate in terms of purchases, amongst the leading importing countries, was attained by Romania, while imports for the other leaders experienced more modest paces of growth.

In value terms, the largest mixed nitrogen, phosphorus, and potassium fertilizers importing markets in the European Union were Spain ($270M), Poland ($218M), and Lithuania ($191M), together comprising 31% of total imports. Germany, France, Romania, Belgium, Ireland, Hungary, Sweden, Denmark, Latvia, and Estonia lagged somewhat behind, accounting for a further 46%.

The import price for mixed nitrogen, phosphorus, and potassium fertilizers in the European Union stood at $351 per tonne in 2019, falling by -1.6% against the previous year.

Average prices varied somewhat amongst the major importing countries. In 2019, major importing countries recorded the following prices: in France ($398 per tonne) and Germany ($381 per tonne), while Sweden ($293 per tonne) and Estonia ($297 per tonne) were amongst the lowest.

From 2012 to 2019, the most notable growth rate in terms of prices was attained by France, while the other leaders experienced a decline in the import price figures.

Source: IndexBox AI Platform