Global Fertilizer Industry
The world fertilizers and agricultural chemicals industry is expected to slow to yearly growth rate of just over 6% between 2010 and 2015 to exceed $276.4 billion, according to research from MarketLine. In terms of consumption volume, the market grew at a yearly rate of almost 3% for the four-year period ending 2010 to exceed 164,000 thousand metric tons.
Global fertilizer demand is expected to maintain its current yearly growth rate of 3% to reach 380 million metric tons in 2010, reports Freedonia. Market growth is driven by an expanding global population, rising biofuel production crop requirements, and declining arable land putting pressure on farmers to boost crop yields. Growing consumption of high-protein products is also driving demand for fertilizer-intensive grains.
Key Market Segments
Agriculture plays a central role in dictating the conditions of the fertilizer market. In 2008 and 2009, fertilizer prices were driven by rising costs of raw materials, reports Freedonia. Farmers were under pressure to control operating costs due to the economic recession, fluctuating crop prices and high input costs by cutting back or putting off fertilizer applications. The market will be positively impacted by growing demand for fertilizer-intensive crops. The outlook for multinutrient fertilizers, potash and phosphate types, in particular, is positive. Growing demand for organic food is also set to benefit the organic fertilizer market.
Regional Market Share
Developed nations like the US dominate smaller commercial and consumer fertilizer markets. Following the economic lows of the housing crisis, the US has begun to witness some degree of recovery. This is benefiting the fertilizer market as homeowners are once again investing in lawn and garden care and food gardening, reports Freedonia.
Over the coming years, Central and South America should represent the regions with the best growth opportunities. Brazil continues to rise as an important agricultural power with increased output helped by fertilizer use.
China’s fertilizer industry has been witnessing small increases in fertilizer demand over recent years, reports CNAGRI. However, the country has seen strong growth in industrial demand for fertilizer. While a small number of leading companies with good control over resources continue to generate high revenue, most fertilizer companies continue to witness weak profitability. The overall fertilizer industry is in a phase of decline, with some small and medium-sized companies withdrawing from the market. Despite declining profitability, investment in the nitrogen fertilizer industry continued to rise rapidly in 2011. However, investment in the phosphate and potash fertilizer segments continues to decline rapidly.
China’s fertilizer companies seek control over resources at higher levels of the industry chain by combining mineral and fertilizer production. At the same time, these companies continue to move into non-fertilizer sectors, including the phosphate chemical and coal chemical industries, creating fluctuations in the market.
The EU fertilizers and agricultural chemicals industry reached almost $34 billion in 2010, having recorded close to 10% yearly growth for four years, reports MarketLine. In terms of consumption volume, the market recorded less than 0.5% yearly growth between 2006 and 2010 to exceed 20,700 thousand metric tons. Market growth is expected to slow to a yearly rate of just over 4% between 2010 and 2015 to reach almost $42 billion.
Fertilizer Industry Trends
Looking ahead, several factors will contribute to fertilizer market growth, including demand from the golf and gardening sectors, reports Freedonia. As disposable incomes rise due to recovery following the economic recession, consumers are spending more on leisure and recreational activities like golfing and gardening. Recovery in the housing sector will see homeowners eager to improve the appearance of their homes, with more money to invest in caring for their gardens.
Leading Industry Associations
- European Fertilizer Manufacturers Association
- The Fertilizer Institute
- International Fertilizer Industry Association
- Fertilizer Industry Federation of Australia
- Canadian Fertilizer Institute
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