Marketing & Distribution

Fertilizer Markets

Global fertilizer consumption is currently about 180 million tons annually and is projected to reach 195 million tons by 2017. The bulk of the global fertilizer market is made up of chemical or “synthetic” fertilizers, which have several drawbacks in terms of soil health and the environment, and which are discussed in the section providing general information on fertilizers. Biological or “organic” fertilizers and soil enhancers are environmentally friendly, effective fertilizers that stimulate plant growth and re-build soils that have been depleted by synthetic fertilizers. They accomplish this because they contain a wide range of micronutrients and other natural substances that chemical fertilizers fail to provide. With the rise in environmental consciousness and the rapidly rising trend in organic farming in recent years, use of biological fertilizers is undergoing extraordinary growth around the world.

Fertilizer demand and prices are expected to follow the trend in world food prices; as the Food and Agriculture Organization of the United Nations “FAO” stated in a recent report:

“Against the rising prices of agricultural commodities, the prices of fertilizers have also marked significant increase since 2010. For instance, the index (2002-04 =100) of FOB price of DAP increased from 176 in 2009 to 263 in 2010 and moved further up at 323 in the first half of 2011. Similar is the situation in respect to other fertilizers. The food price index in 2011 at 233 crossed the earlier peak of 200 in 2008. Under such scenario, the high agricultural commodity prices provide incentives for farmers in market-oriented economies to invest in fertilizers and other inputs for higher productivity.”

The USA and Canada are major users of fertilizer in North America; this fertilizer market had total revenues of US$15.3bn in 2012, and is expected to approach $18 billion by 2017. The share of North America in world consumption of nitrogen is 13.1 percent, phosphate 11.4 percent and potash 17.3 percent. The growth rate in demand for nitrogen, phosphate and potash is expected to be 0.8, 0.9 and 1.2 percent, respectively, between 2011 and 2015.

Growth rates for fertilizer consumption are forecast to be substantially higher in Latin America than for North America in the foreseeable future. Brazil, Argentina, Mexico and Colombia constitute the major users of fertilizer in Latin America.

Global growth in fertilizer demand is expected to expand in response to the following:

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• World population growth, which is expected to reach 8.5 billion by 2025, a large increase from today’s 7.1 billion.

• Changing diets – Rising living standards in many regions are expanding the protein component of people’s diets, thus demanding more meat which, in turn, requires more feed for livestock.

• Higher food consumption per capita – this is a long term trend that also reflects the rising living standards in many countries, particularly throughout Asia.

The rapid growth in global population is accelerating, as depicted in the FAO chart above: