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Fertilizer Market: Top Trends Boosting the Industry Revenue Through 2028

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Archives, Global Trade Daily, Market insight

Fertilizer Market: Top Trends Boosting the Industry Revenue Through 2028

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According to a recent study from market research firm Graphical Research, the global fertilizer market size is set to register a significant growth during the forecast period, owing to rising global food demand. Have a look at the key trends that are likely to stay prevalent in the industry through 2028:

  • U.S. records soaring organic fertilizer sales 

U.S. organic fertilizer market size is estimated to grow with a CAGR of over 4% through 2028. As people become more aware of their lifestyle choices and their associated health risks, they are consuming more fresh farm goods. 

Especially after the recent coronavirus outbreak, there has been a higher interest in products that are infused with immunity boosting characteristics, including functional fruits and vegetables. To that end, leading fertilizer companies have been increasing the production of organic products that have minimal negative impact on soil quality. 

To satisfy growing healthy food demand, farmers are increasing the use of organic fertilizers in agriculture. The region is capitalizing on organic fertilizers as an effective alternative to combat climate change. The U.S. government is also implementing various initiatives to promote the use of organic fertilizers as they do not pollute the environment.

  • Fresh investment in fertilizer production in North America

Due to ongoing tensions with Ukraine, Russia, one of the top fertilizer suppliers, has suspended fertilizer exports beginning in February 2022. As a significant importer of foreign fertilizer, the United States suffered as a result of this decision.

To address rising fertilizer costs and shortages caused by the conflicts, in March 2022, the U.S. Department of Agriculture (USDA) announced that it will support additional fertilizer production for American farmers. Through a new grant program of $250 million, the USDA aims to support innovative, independent, and sustainable American fertilizer production. 

  • Dry form of fertilizer garners wide acceptance in North America 

North America fertilizer market revenue from the dry form segment is expected to be worth over $24 billion by 2028, owing to its slow-release rate, which allows crops to be fed for a longer period of time. Dry fertilizer offers the benefit of more storage time than some liquid counterparts without the concern of settling out over time. 

They are usually cheaper in bulk, and a better option for fertilizing fields when preparing for planting, as the nutrients stay present for longer. These products may also be used to make various blends by combining different granular fertilizers in the right quantities to generate the needed mix. 

  • Malaysia market outlook appears to be optimistic through 2028

With agriculture and plantation being two key sectors generating significant profits in the country, Malaysia inorganic fertilizer market size is expected to showcase remarkable growth up to 2028. Thanks to the presence of reputed organizations such as the Fertilizer Association of Malaysia (FIAM), regional market participants have been able to strengthen their position both internationally and locally. 

The nation has been attempting to reduce commodity imports such as rice. To alleviate rice shortages, Malaysia’s Minister of Agriculture and Food Industries said in September 2021 that the regional rice buffer stock will be raised to around 290,000 metric tons by 2023.

  1. Horticulture activities gain traction across Asia Pacific 

The Europe fertilizer market share from horticulture segment is expected to grow with an appreciable pace through 2028. Regional governments have been supporting the horticulture sector by sanctioning incentives, subsidies, and funds. In June 2022, to strengthen the horticulture sector in the Indian province of Haryana, the state government authorized Japan International Cooperation Agency’s funding of about $328 million. With this agreement, the local market will meet consumer demands while also assuring enough fruit and vegetable exports.

  • Europe’s thriving agriculture sector powers market growth 

The Europe fertilizer market share from agriculture will see considerable expansion until 2028. Farmers have been looking for ways to enhance efficiency throughout their fields to satisfy rising food demand. 

Successful use of better technology, such as precision fertilization, has been one of the most effective means of enhancing agricultural output. Fertilizer use on farms has not only added nutrients and energy to cropping systems, but it has also contributed to an increase in annual crop yield. 

  • Significant investments to drive Germany fertilizer market forecast

Germany industry size is expected to grow with a 2% CAGR through 2028. In order to fulfill future food demands, Europe has established the Feeding Life 2030 initiative, which aims to enhance fertilizer efficiency and raise fertilizer awareness. Such programs will not only assist Europe in meeting future food demands but will also encourage effective fertilizer usage throughout the region.

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Fertilizer Prices Spike and Will Continue Rallying Next Year

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

Fertilizer prices continue to ramp up due to a shortage in supply caused by lower output in EU countries. High natural gas costs shape that growth because gas accounts for up to 80% of variable costs in nitrogen fertilizer production. Urea prices spiked exceptionally high to $900 per tonne in November 2021, gaining 30% against the previous month. Phosphate rock price rose by 4%, while diammonium phosphate and triple superphosphate were both up by 8%. Next year, fertilizer prices are projected to climb further due to a continued shortage in supply, but if costs for natural gas maintain their downward trend, they will hold the price increases back.

Key Trends and Insights

Fertilizer prices are continuing to rise. According to the December data from the World Bank, the urea price shot upward by 30% in November compared to the previous month, reaching $900.5 per tonne. This is already the second significant gain seen this year. Phosphate rock has also become more expensive by +4% up to $153 per tonne, while diammonium phosphate and triple superphosphate each increased by +8% to $727 and $665 per tonne, respectively.

The key factors driving fertilizer prices up were a supply shortage on the global market and the growing costs of natural gas, which account for up to 80% of variable costs in producing nitrogen fertilizers. Faced with more expensive energy resources, many European producers had to stop production as they couldn’t compete with counterparts in Russia, countries in the Persian Gulf and northern Africa. As a result, the global supply of fertilizer decreased and led to subsequent price increases.

According to the World Bank, in November, the prices for natural gas in the U.S. decreased by -8% to $5.02 per MMBtu, and by -11% in Europe to $27.6 per MMBtu, but despite that, they are still at record highs. If the cost for natural gas declines, it may reduce the rate of price increases in the upcoming months. However, this will not eliminate the long-term upward trend in fertilizer prices as there will still be a shortage in supply.

Global Fertilizer Exports by Country

In 2020, global fertilizer exports amounted to 204M tonnes, increasing by 2% from the previous year’s figure. In value terms, exports dropped to $52.7B (IndexBox estimates)

The largest fertilizer supplying countries worldwide were Russia ($7B), China ($6.3B) and Canada ($5.1B), together comprising 35% of global exports. These countries were followed by the U.S., Morocco, Saudi Arabia, Belarus, Germany, the Netherlands, Belgium, Israel, Oman and Algeria, which together accounted for a further 38%. The shipments of the three major exporters of fertilizers, namely Russia, China and Canada, represented more than a third of total export in physical terms.

Top Largest Importers Worldwide

Brazil (34M tonnes), India (25M tonnes) and the U.S. (23M tonnes) represented roughly 37% of total imports of fertilizers in 2020. It was distantly followed by China (10M tonnes), generating a 4.8% share of total imports. France (7.4M tonnes), Indonesia (6.2M tonnes), Australia (5.2M tonnes), Thailand (5M tonnes), Canada (4.4M tonnes), Turkey (4.3M tonnes), Germany (4.1M tonnes), Argentina (4M tonnes) and Belgium (3.9M tonnes) held small shares of total imports.

In value terms, the largest fertilizer importing markets worldwide were Brazil ($8.6B), India ($7.1B) and the U.S. ($5.6B), together accounting for 36% of global imports. These countries were followed by China, France, Australia, Thailand, Canada, Indonesia, Argentina, Turkey, Germany and Belgium, which together accounted for a further 24%.

Source: IndexBox Platform

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European Calcium Ammonium Nitrate Exports Grow Robustly

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IndexBox has just published a new report: ‘EU – Calcium Ammonium Nitrate (CAN) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, calcium ammonium nitrate exports in the EU peaked at 9.1M tonnes, reaching the highest point over the past decade. In value terms, they reduced from $1.7B in 2019 to $1.6B due to a decline in export prices. Last year, the calcium ammonium nitrate export price in the EU dropped by -10% compared with figures of 2019. The Netherlands, Belgium, Germany, France, Slovakia, Hungary and Lithuania supply 82% of total European exports of calcium ammonium nitrate in physical terms.

Calcium Ammonium Nitrate Exports in the EU

Calcium ammonium nitrate exports stood at 9.1M tonnes in 2020, with an increase of +3.5% compared with the previous year’s figure. In value terms, calcium ammonium nitrate exports declined from $1.7B in 2019to $1.6B (IndexBox estimates) in 2020.


 

The calcium ammonium nitrate export price in the EU stood at $177 per tonne in 2020, declining by -10% against the previous year. Average prices varied noticeably amongst the major exporting countries. In 2020, major exporting countries recorded the following prices: in France ($195 per tonne) and Belgium ($185 per tonne), while Lithuania ($163 per tonne) and Hungary ($167 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by the Netherlands, while the other leaders experienced a decline in the export price figures.

In 2020, the Netherlands (2.7M tonnes), distantly followed by Belgium (1,669K tonnes), Germany (1,026K tonnes), France (575K tonnes), Slovakia (498K tonnes), Hungary (483K tonnes) and Lithuania (446K tonnes) represented the key exporters of calcium ammonium nitrate (CAN), together mixing up 82% of total exports. Spain (390K tonnes) took a relatively small share of total exports.

In 2020, the most notable rate of growth in terms of shipments, amongst the leading exporting countries, was attained by Hungary, while exports for the other leaders experienced more modest paces of growth.

In value terms, the largest calcium ammonium nitrate supplying countries in the EU were the Netherlands ($469M), Belgium ($309M) and Germany ($189M), together comprising 60% of total exports. These countries were followed by France, Slovakia, Hungary, Lithuania and Spain, which together accounted for a further 26%.

Source: IndexBox Platform

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Archives, EU Trade, Global Trade Daily

New Carbon Footprint Limitations to Tighten Competition on the European NPK Fertilizer Market

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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