Fertilizer Additive Market

Market Overview

The global fertilizer additive market size was valued at USD 3.4 billion in 2022. It is estimated to reach USD 4.7 billion by 2031, growing at a CAGR of 3.6% during the forecast period (2023–2031). Growing demand for food grain due to the increasing population and the positioning of subsidiary schemes to purchase fertilizers by the governments of various nations have increased the consumption of fertilizers in the agriculture sector.

Fertilizer additives are chemical or natural chemicals added to fertilizers to boost plant growth and agricultural production. These additions can improve the composition of fertilizers, ensuring that they contain the proper balance of nutrients for plants to thrive effectively in various soil types and farming settings. Surfactants, micronutrients, hydrogels, and biostimulants are examples of additions in the worldwide fertilizer additive industry. These additives can be added to the soil or directly to the plant to boost the absorption of nutrients, water, and other growth-related factors.

Farm fertilizer additions primarily apply in agriculture, specifically crop productivity, promoting green plants, boosting oil yield, and improving food quality. Fertilizer additives have many applications, including farms, greenhouse horticulture, and hydroponic farming.

Market Dynamics

Market Drivers

Robust Growth of the Fertilizer Industry

Fertilizers are used to increase soil yield. They are divided into two categories: organic and inorganic. Organic fertilizers include manure, fish meal, granite meal, and seaweed, whereas inorganic fertilizers include nitrogen, phosphorus, and potassium. Inorganic fertilizers' capacity to function faster than organic fertilizers is expected to accelerate their expansion. Inorganic fertilizers can be divided into two broad sub-segments: macronutrients and micronutrients.

Macronutrients are the elements that are needed in larger quantities and include nitrogen, phosphorus, potassium, and calcium. Out of these, nitrogen is the most essential nutrient. Micronutrients include iron, manganese, and chlorine, used in minute quantities. Growing demand for food grain due to the increasing population and the positioning of subsidiary schemes to purchase fertilizers by the governments of various nations have increased the consumption of fertilizers in the agriculture sector. This has increased the demand for chemical fertilizers, which, in turn, has eventually fueled the market growth of fertilizer additives.

Increasing Growing Population and Shrinking Arable Land

Marketing Farmers are required to produce food grains in large quantities in a short period due to the explosion of population. Moreover, the size of arable land per person has shrunk because of the population explosion, which has increased pressure on farmers to produce more crops on less available land. The limited availability of agricultural land is one of the significant barriers to the production of agriculture. Out of 12 billion hectares of the total land, only 1.6 billion land is used for agricultural production. While Asia Pacific has 39% of that land, Europe, Africa, and the Middle East have 36%. North America covers 15%, and the rest, 10%, is in Latin America. The availability of arable land per capita is expected to reduce over the coming years, which, in turn, is expected to facilitate the consumption of fertilizer additives to increase the productivity of crops.

Market Restraint

Lack of Awareness and Availability

Growing awareness about the benefits of using fertilizers in crop production led to their rising demand. Accordingly, understanding the proper ways of storing fertilizer and transportation has increased adoption. However, in many parts of the world, consumers must know the importance of using fertilizer additives. Lack of understanding is evident in developing nations such as Africa and several Asian Pacific countries such as Bangladesh, Nepal, and Bhutan. Traditional agricultural lands are partly to blame for a lack of knowledge regarding fertilizer additions. The growing government focus on losses related to fertilizer storage and transportation is projected to influence the industry. These issues are anticipated to stymie the expansion of the fertilizer additives industry. Overcoming these constraints will take more work for both additive producers and governments.

Market Opportunities

High Growth of Agriculture Sectors in Emerging Markets

Crop demand is expanding rapidly, driven by rising populations, increased disposable income, and continuous urbanization. These elements are prevalent in growing economies such as Brazil, Russia, India, and China. These economies likewise make significant efforts to address the issues linked with the expanding population. These countries' various agricultural sectors support local government activities. The continued drive for food productivity has been central to the strategic decisions. The decisions are also supported by investment in agricultural research and financing the farmers. The governments are also conducting social programs to inform the farmers about the benefits of plant breeding technologies, including hybridization and genetic modification.

Regional Analysis

Based on region, the global fertilizer additive market is bifurcated into North America, Europe, Asia-Pacific, Latin America, the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global fertilizer additive market shareholder and is estimated to grow at a CAGR of 2.9% over the forecast period. Rice is the staple food crop for most Asians. About 90% of the world's rice supply is produced in Asia. Agriculture is a primary sector in many Asian countries, such as India, Bangladesh, and Sri Lanka. The growing agricultural industry in these countries is expected to drive fertilizer consumption, consequently increasing the demand for additives. Anti-caking agents dominated the Asia-Pacific market in 2018. The primary function of these agents is preventing fertilizers from flaking and caking, thereby avoiding deterioration of their quality.

In addition, anti-dusting accounted for the second highest share due to exposure of fertilizers to pollution and dust during transportation from retailers to farmers, augmenting the market growth. Urea led the end-product segment in the Asia Pacific in 2018. Since it is one of the most readily available fertilizers in the world, it can be used for cultivating various crops. Besides, it can be synthesized easily and is widely used by farmers in this region. Ammonium nitrate is one of the famous and affordable fertilizers in this region due to its low manufacturing cost.

North America is anticipated to exhibit a CAGR of 2.7% over the forecast period. Besides being one of the largest agricultural hubs, North America is one of the most homogeneous regions regarding farmer profile and intensification level. Availability of water and fertile land, efficient infrastructure, and entrepreneurial farmers act as a competitive advantage to the North American region. The U.S. Urea and ammonium nitrate dominated the fertilizer additives market in North America and were the most popular fertilizers in this region in 2018. The growing fertilizer industry and crop nutrient management planning have increased the demand for additives in North America. Anticaking was the most common function of fertilizer additives in 2018.

Moreover, additives prevent fertilizers from developing lumps and flakes, which could deteriorate their quality. Anti-dusting agents protect fertilizers from dust accumulation due to exposure to air, moisture, and pollution during transport. Urea was the most widely used fertilizer in North America. It cultivates corn, wheat, soybeans, canola, alfalfa, cotton, and barley. The price of urea depends upon the price of ammonia and natural gas. Ammonium nitrate is the second most widely used fertilizer because of its low cost and easy availability. These factors are driving the consumption of fertilizer additives in the region.

Europe is one of the significant consumers of fertilizer additives on account of its growing agriculture industry, aided by land availability and suitable weather conditions that lead to the vast production of multiple crops. Conversely, various agencies are establishing regulations regarding synthetic fertilizers in the region. European Commission sets numerous rules on the manufacturing and use of fertilizer additives.

Latin America is one of the leading exporters of food and agricultural commodities. The presence of significant unexploited agricultural landmarks in the region. Major crops produced in the area are corn, soybean, pineapple, sugarcane, and coffee. The demand for the protection of organic crops is growing with increased investments and research to identify microorganisms, hormones, and enzymes that enhance plant metabolism. This factor is propelling fertilizer additives market demand in the region.

The Middle East and African agriculture markets need to be more developed as they are primarily dry and have water scarcity. However, South Africa, Kenya, and countries across the Mediterranean Sea are highly dependent on agriculture. Wheat, barley, chicory roots, grapes, and maize are the major crops cultivated in the region. The contribution of the agriculture sector to the economy of countries varies considerably. For instance, it accounts for around 3% of Saudi Arabia and 13% of Egypt. Accordingly, fertilizer consumption and demand for additives also vary. The need for high yield in the agriculture sector is met through subsequent requests for higher quality fertilizers and micro-nutrients, which has positively influenced the growth of fertilizer additives in the region in the market.

Segmental Analysis

The global fertilizer additive market is bifurcated based on functions.

Based on functions, the global fertilizer additive market is bifurcated into corrosion inhibitors, hydrophobic agents, anti-dusting agents, anti-caking agents, slow-release agents, and other parts.

The anti-caking agents segment dominates the global market and is projected to exhibit a CAGR of 3.2% over the forecast period. Anti-caking is considered to be the most crucial function of fertilizer additives. Most fertilizers tend to form agglomerates due to a variation in storage temperatures. The severity of caking can be determined by analyzing the formation of agglomerates, which are influenced by factors such as chemical composition, hygroscopic properties, product temperature, mechanical strength, and moisture content of the fertilizers. Anti-caking agents prevent the formation of agglomerates and help in preserving the quality of fertilizer.

Fertilizers tend to develop cakes and flakes during monsoons or even due to a change in the environmental temperatures, which affects their overall quality. Most farmers are concerned with the health impact of anti-caking agents. Hence, vegan and organic anti-caking agents are safe and present in deficient concentrations in various fertilizer and food applications. These factors are influencing the eco-friendly anti-caking market demand.

Recent Developments

• May 2023- Novochem Group, a prominent provider of fertilizer additives, announced the acquisition of ChemSol LLC's assets, a maker of dedusting agents. Novochem's product range will be expanded due to this purchase, as will its position in the worldwide fertilizer additive industry.
• June 2023- Kronos, a renowned provider of fertilizer additives, announced the signing of a new supply deal with a sizeable Chinese fertilizer company. This partnership will help Kronos maintain its expansion in the Chinese market.