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The global fertilizer market is estimated to be valued at $251.57 billion by 2030, surging from $184.6 billion in 2021, at a noteworthy CAGR of 3.55%.
The coronavirus outbreak has led to enormous uncertainty for various businesses. Fertilizer market faced supply chain issues due to closed borders and import-export restrictions. The fertilizer market was greatly affected as China, which is the major producer and consumer of sulphur, sulphuric acid, and phosphates, was badly hit by the COVID-19 virus, the fertilizer production units were closed. In addition, production rates also declined significantly. The lockdown imposed in China caused bottlenecks in the supply chain of phosphates, sulphur, and sulphuric acids, which are the raw materials required for manufacturing of fertilizers. In terms of logical constraints, cross-border transport was negatively impacted. For instance, the cross-border transport of fertilizers would require the drivers to be quarantined for two weeks to prevent the spread of COVID-19 virus. In addition, fertilizer industry faced shortage of labors due to the fear of getting contracted with COVID-19 virus and social distancing norms. Similarly, India, being the producer, consumer, and importer of fertilizers, faced negative impact in terms of logistics, availability of raw materials, and fertilizers. Due to rapid spread of COVID-19 virus, Indian ports laid down strict restrictions and number of stipulations, such as 14-days quarantine and disinfection for vessels & raw materials arriving from various affected areas.
Various government initiatives, such as including agricultural activities and related sectors under essential services to facilitate its smooth operations are helping the society to recover from the chaotic situation. For instance, as stated on April 16, 2020, in the Economic Times, the leading daily newspaper, the Department of Fertilizers (DoF) in India is closely monitoring the production and distribution of fertilizers and all essential soil nutrients amidst the COVID-19 pandemic to achieve significant growth in the fertilizer sector. In addition, as stated on April 28, 2021, National Informatics Centre, the Ministry of Electronics and Information Technology, fertilizer companies to supply 50 Metric Tons (MT) of medical oxygen daily for COVID-19 patients. Moreover, the Department of Fertilizers (DoF) is coordinating with the Ministry of Shipping for priority accommodation of fertilizers and unloading of fertilizers at ports. In addition, the ground level coordination was initiated by state governments for smooth running of logistic chain, for smooth operation of social distance protocols, and healthy hygiene.
Fertilizer market has gained huge popularity due to increasing demand for food production to satisfy the food requirements of growing population. Fertilizers, whether chemical or organic are applied to crops to increase the agricultural productivity and improve the crop yield on poor-quality land. Fertilizers improve soil texture, recycle nitrogen, and introduce essential bacteria in the soil. Crops such as corn, cotton, and wheat receive nutrients from the soil in which they grow. These crops deplete the soil nutrients in various ways by utilizing the available nutrients present in the soil. Hence, fertilizers play an important role in providing crops with the essential nutrients, such as nitrogen, phosphate, potassium, and others that are required for the growth of crops. The world's population is rapidly expanding. The demand for food is increasing as the population grows. Providing food for this expanding population has become a challenge. Arable land, on the other hand, is disappearing as a result of industrialization and urbanization. According to the FAO's 'Resource Outlook to 2050,' agricultural production covers more than 1.50 billion hectares (about 12 %) of the world's land surface. There is minimal room for further agricultural land expansion. This is expected to increase the demand for fertilizers.
However, excess use of fertilizers is estimated to restrain the market growth. Excessive use of fertilizers especially chemical fertilizers is harmful for environment as it leads to pollution by emitting toxic greenhouse gases such as nitrous oxide. In addition, uncontrolled use of fertilizers is harmful for human health as it causes respiratory diseases, cancers, and increases allergenic pollen production. Moreover, high concentration of fertilizers disturbs the soil nutrients and creates imbalance by making the soil acidic. Excess use of fertilizers can burn the plants and kill them. In addition, over using nitrogen in fertilizers stimulates the growth of microorganisms, depleting the organic content present in the soil.
Latest technological innovations in fertilizer industry are estimated to generate huge growth opportunities during the forecast period. The implementation of cutting-edge technologies such as precision agriculture, innovative fertilizer products, and innovations in fertilizer production are estimated to drive the fertilizer market demand. For instance, precision agriculture includes various emerging technologies such as soil analysis & testing technologies, soil mapping using remote sensors, geographic information systems (GIS), global positioning systems (GPS) using satellite, airplanes, and drones.
According to numerous projections, by 2050, the global per capita arable land area will have decreased to 0.18 ha, compared to 0.15 ha in developing nations and 0.42 ha in rich countries. Furthermore, the global population, which stood at 7.4 billion in 2016, is expected to rise to 9.7 billion by 2050, with nearly all of the growth taking place in emerging countries. Between 2005 and 2050, it is recommended that world food production be raised by 60.0%to 70.0%. Per capita land is predicted to decrease in the future as a result of population growth and a continuous rate of land degradation. As a result, there is pressure on existing arable land to produce more food using technologically superior fertilizers in order to meet demand, therefore such factors are estimated to generate excellent growth opportunities.
The global fertilizer market is segmented based on type, form, application, and region.
Type:
The type segment is further classified into organic and inorganic. Among these, the inorganic sub-segment is anticipated to have a dominant market share and shall surpass $229.92 billion by 2030, with an increase from $171.19 billion in 2021.
One of the primary benefits of inorganic fertilizers is their rapid action. Inorganic fertilizers, for example, contain nutrient-rich salts that dissolve quickly and are immediately available to plants for nourishment. Furthermore, inorganic fertilizers contain precise amounts of essential nutrients such as nitrogen, potassium, and phosphorus to meet the needs of specific plants. These fertilizers are also easy to use because they come in a variety of formulations such as dry granules, liquid concentrates, and water-soluble powders. Because these fertilizers are manufactured in bulk, they are less expensive and help to balance soil nutrients for increased crop yield and quality.
Form:
The form segment is further classified into dry and liquid. Among these, the liquid sub-segment is anticipated to have fastest growth and shall surpass $49.15 billion by 2030, with an increase from $32.74 billion in 2021.
The world's expanding population has led in greater food demand, which will lead to higher fertilizer use. The main issues, however, are soil pollution and contamination, as well as their negative effects on people and the environment. Governments are emphasizing the use of soil-friendly fertilizers to avoid these harmful outcomes. As a result, farmer awareness of liquid fertilizers has increased, particularly in China and India. Manufacturers and non-governmental organizations collaborate to educate farmers about the short- and long-term benefits of their products.
Application:
The application segment is further classified into agriculture, horticulture, gardening, and others. Among these, the agriculture sub-segment is anticipated to have a dominant market share and shall surpass $110.02 billion by 2030, with an increase from $83.23 billion in 2021.
Fertilizers play a crucial role in boosting the agricultural yield without which the crop productivity would decline significantly. In countries like India, more than 50% of the population is dependent on agriculture and they use different types of fertilizers to enhance the crop yield. To grow healthy crops, farmers must ensure that they have a healthy soil. Without fertilizers, nutrients in the soil would replenish at a faster rate, thereby affecting the agricultural productivity. Hence, to meet the food demand of the growing population it is important to use fertilizers.
Region:
The fertilizer market in the Asia-Pacific region is projected to witness rapid growth. This market generated a revenue of $99.13 billion in 2021 and is further projected to reach up to $137.61 billion by 2030.
Asia-Pacific countries such as India and China are the largest fertilizer producers as well as consumers in the world. For instance, India being the agricultural country, is the second largest consumer of fertilizer after China. In addition, as stated on July 18, 2021, in the Pure & Eco India, popular magazine which promotes the Indian organic market, the organic food business in India is estimated to reach Rs. 75,000 crores by 2025. Most of the consumers in India who buy groceries and vegetables, at least buy one organic item. The growing demand for organic food has boosted the demand and sale of bio-fertilizers in India. These bio-fertilizers use micro-organisms to improve the fertility of soil and enhance the crop productivity. The rapid urbanization, globalization, and development of smart cities due to growing population has decreased the availability of arable land for agriculture and increased the demand for food. In addition, various government initiatives such as subsidies on the purchase of different fertilizers is estimated to drive the fertilizer demand in India. For instance, as stated on May 27, 2021, in the Indian Express, leading news platform, Indian government increased subsidy by on di-ammonium phosphate (DAP) fertilizer by 137%. In addition, Indian government has also launched nutrient based subsidy (NBS)in 2010. Under this scheme, a fixed amount of subsidy is provided on annual basis on each grade of phosphatic and potassic (P&K) fertilizers based on their nutrient content.
Some of the leading global fertilizer market players are
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