China Fertilizers Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

According to the Ministry of Agriculture of the People’s Republic of China (MOA), the use of organic fertilizers as a replacement for chemical fertilizers is one of the key points of agricultural supply-side structural reform in China, and it has a restraining influence on the growth of the chemical fertilizers market in China. The key crops used in the country for the trial fertilizer-replacement program are fruits, vegetables, tea, and others. In May 2016, the “Soil Pollution Prevention Action Plan” was issued to provide strong support for the promotion of organic fertilizer in the country. The government accords great importance to the production of organic fertilizers, and implements a tax exemption policy (implemented in 2016) for bio-organic fertilizer products, providing further support for the development of the organic fertilizer industry in China. The rising number of product innovations and activities in the organic fertilizer market in China act as a restraint to the chemical fertilizers market. The major organic fertilizer companies in the country are Inner Mongolia Wofeng Agricultural Development Co., Shandong Zhongxin Agricultural Development Co., Hunan Zhonghua Dongfang Fertilizer Co. Ltd, among others.

The urea fertilizer segment accounted for more than 50% share in the nitrogenous fertilizer market, in 2019. According to the China National Nitrogen Fertilizer Industry Association, the production capacity of urea declined from 72.76 million tons in 2017 to 69.5 million metric tons in 2018. China is the largest consumer of urea fertilizers in the Asia-Pacific region as well as globally, with almost one-third of the global urea production is being consumed in the country. However, the demand for urea slightly declined in the year 2017 partly due to a more modest application rate as compared to the over-application in previous years, driven by China’s zero fertilizer consumption policy. Even so, ammonium bicarbonate and ammonium chloride are still applied in China due to their on-going availability and usage by farmers. About 60% of urea in China is consumed in cereals and oilseeds such as maize, soybean, and rapeseed production.

In 2017, the International Plant Nutrition Institute (IPNI) of China conducted a Controlled-Release Urea (CRU) fertilizer application program in Hubei province in Central China. It has been proved that the consistent use of CRU fertilizer helps in improving the yield and profitability of major crops, such as rice and eggplant. The Government of China is conducting various awareness programs through conducting farmer meetings and field trials, in order to alleviate the use of urea fertilizers and increase yield with the use of CRU fertilizers.