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

Market Overview

The fertilizers market is projected to register a CAGR of 2.1% during the forecast period, 2021-2026. 

Since the COVID-19 outbreak, the fertilizer industry has been significantly affected in many parts of the world by the outset of the pandemic. Due to the shortage of labor and the shutdown of a few fertilizer plants located in the integrated chemical complexes, shipments were affected in the initial lockdown process. China, being the epicenter of the pandemic, was greatly impacted in the beginning. However, the conditions in the country have stabilized, and production rates have increased for all fertilizers. Hence, the overall effect of COVID-19 on the fertilizer industry is observed to be moderate.

Asia-Pacific is the largest fertilizers market and accounts for a share of around 60.0% of the overall market. China is the largest consumer of fertilizers in the Asia-Pacific region, and it accounted for around 53.0% share in the Asia-Pacific fertilizer market in 2019.

Over the long term, the technological innovations in the industry, coupled with the growing demand for N, P, and K and micronutrient fertilizers, are expected to drive the market growth. However, regulatory and environmental constraints and high production costs are likely to act as drawbacks in the industry.

Scope of the Report

Fertilizers are natural or artificial substances containing chemical elements that improve the growth and productiveness of plants. Fertilizers enhance the soil’s natural fertility or replace the chemical elements taken from the soil by previous crops. Modern fertilizers include nitrogenous, potash, and phosphate fertilizers. Some fertilizers also contain certain "micronutrients" such as zinc and other metals that are necessary for plant growth. The fertilizers market is segmented by type (straight and complex), crop type (grains and cereals, pulses and oilseeds, commercial crops, fruits and vegetables, and other crop types), and geography (North America, Europe, Asia-Pacific, South America, and Africa).

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Key Market Trends

Decreasing Per Capita Arable Land and Increasing Food Demand

The global population is increasing at a rapid rate. This growing population is adding to the food demand. Supplying food to this growing population has become a threat. On the other hand, arable land is declining due to industrialization and urbanization. The FAO revealed in 'The Resource Outlook to 2050' that at this time, more than 1.50 billion hectares of the world’s land surface (about 12%) is used for crop production. There is little scope for further expansion of agricultural land.

The global per capita land availability was around 0.22 ha in 2005, which reduced to 0.19 ha in 2016. As per several reports, the per capita arable land area will decline to 0.18 ha by 2050 across the world, compared to 0.15 ha in developing countries and 0.42 ha in developed countries. Further, the global population of 7.4 billion in 2016 is projected to increase to 9.7 billion by 2050, with almost all increases occurring in developing countries. Thus, it is recommended that global food production be increased by 60.0% to 70.0% between 2005 and 2050. As a result of population expansion and a steady land degradation rate, the per capita land is expected to decrease in the future. Thus, this has led to a situation where there is pressure on the existing arable land to produce more food using technologically advanced fertilizers in a sustainable way.

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