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The Fertilizer Market Projected to Grow at a CAGR of 5.0% and Generate a Revenue of $323,375.0 million by 2028

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The global fertilizer market is predicted to be valued at $323,375.0 million by 2028, surging from $221,428.6 million in 2020, at a noteworthy CAGR of 5.0%.

Impact Analysis of COVID-19 on the Fertilizer Market

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.

Global Fertilizer Market Analysis

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 use of fertilizers helps in delivering essential nutrients to feed the world population. For instance, the micronutrient fertilizers enrich the crops with essential nutrients to support human health. Micronutrients such as zinc which is important to human health is provided by micronutrient 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 usingnitrogen 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. In addition, the use of nutrient status monitors to check the presence of nutrients in the soil is estimated to drive the fertilizer market growth. The deep banding of fertilizer which includes fertilizer applications to few centimetres below the surface near the plant roots and microdosing techniques are estimated to generate excellent growth opportunities.

Global Fertilizer Market, Segmentation

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 $186,167.5 million by 2028, with an increase from $129,645.6 million in 2020. One of the key advantages of inorganic fertilizers is fast acting. For instance, inorganic fertilizers include nutrient-rich in salts that dissolve quickly and are immediately made available to the plants for their nourishment. In addition, the inorganic fertilizers have precise content of essential nutrients such as nitrogen, potassium, and phosphorus to meet specific plant needs. Also, these fertilizers are easy to use as they are available in different formulations such as dry granules, liquid concentrates, and water-soluble powders. These fertilizers are produced in bulk due to which they are less costly and balance the soil nutrients for higher yield and better quality of crops.

Form:

The form segment is further classified into solid and liquid. Among these, the solid sub-segment is anticipated to have a dominant market share and shall surpass $200,943.9 million by 2028, with an increase from $139,652.8 million in 2020. Granular or solid fertilizers slowly deliver nutrients to plants, but they have longevity. Solid fertilizers are beneficial for small gardens and farms as they have low cost, better control over the release of nutrients in the soil, and easy storage. Most of the fertilizers available in the market are dry in the form of pellets, granules, and powders. These are then dissolved in the water and diluted before the fertigation process. As these fertilizers are available in powdered form, there are less chances of waste or spills and they are cheaper when purchased in bulk. 

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 $130,795.8 million by 2028, with an increase from $87,566.5 million in 2020. 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 for the Asia-Pacific region is projected to witness rapid growth. This region’s market generated a revenue of $72,584.3 million in 2020 and is projected to reach up to $108,902.3 million by 2028. 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 has 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.

Key Players in the Global Fertilizer Market

Some of the leading fertilizer market players are

  1. Yara International
  2. Nutrien Ltd.
  3. The Mosaic Company
  4. Haifa Group
  5. Syngenta AG
  6. ICL Group Ltd.
  7. EuroChem Group
  8. OCP Group S.A.
  9. K+S Aktiengesellschaft
  10. Uralkali

Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.

Porter’s Five Forces Analysis for the Global Fertilizer Market:

  • Bargaining Power of Suppliers: Fertilizer market players buy various raw materials such as urea, phosphate, and others from various suppliers. Hence, the suppliers can use their bargaining potential to grab high profits from the fertilizer producers.   
    Thus, the bargaining power of suppliers is high.
  • Bargaining Power of Buyers: In this market, the concentration of buyers is high. Also, these buyers purchase different types of fertilizers such as organic, synthetic, mineral, biofertilizers, and others.
    Thus, buyer’s bargaining power will be high.
  • Threat of New Entrants:  The threat of new entrants is moderate as huge capital investment is required to setup fertilizer plant. However, new entrants can opt for organic fertilizer production as the demand for organic food is increasing rapidly across the world. 
    Thus, the threat of the new entrants is moderate.
  • Threat of Substitutes: There are various substitute products available in the market such as vermicompost, green manure, manure, and others increasing the threat from substitution.  
    Thus, the threat of substitutes is high.
  • Competitive Rivalry in the Market: The fertilizer market players are focusing on enhancing their production capacity by using innovative technologies such as nutrient sensors, precision agriculture, and others. 
    Therefore, competitive rivalry in the market is high.
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