Fertilizers Market Size, Share & Trends Analysis Report By Type (Nitrogenous, Phosphatic, Potassic, Micronutrients, Other Types), By Applications (Grains and Cereals, Pulses and Oilseeds, Fruits and Vegetables, Commercial Crops, Other Applications) and By Region (North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2025-2033

Fertilizers Market Growth Factors

Rising Population and Decreasing Arable Land

Currently, the global population is flourishing rapidly, and there is an increase in the demand for food. On the other hand, due to industrialization and urbanization, the available arable land is decreasing in many regions globally. Hence, increasing crop productivity is needed to meet the demands.

FAO's Resource Outlook to 2050' revealed that more than 1.5 billion hectares of the earth's land surface (about 12%) is used for crop production. There is little or no scope for further expansion of agricultural land. The decrease in arable land led to a situation where there was pressure on the existing arable land to produce more food sustainably by utilizing technologically advanced fertilizers. Therefore, the availability of fertilizers per the crop and soil requirements and increasing food demands with decreasing arable land are expected to simulate the fertilizers market during the forecast period.

Favorable Government Policies

Governments across all nations offer support through incentives, subsidies, loans, and tax waivers on agricultural products and fertilizers, thereby boosting the overall industry. Governments offer fertilizer subsidies primarily to increase agricultural production while insulating farmers from the rising prices of fertilizers.

• For instance, in 2019, the Thai government announced new stimulus measures for Thai farmers through cheap fertilizers. This measure was included on the state welfare smartcard to provide the subsidy directly to the holders.

On the other hand, currently, Indian farmers purchase urea at greatly subsidized prices (approximately 30% of prevailing Cost Insurance And Freight (CIF) prices), and the country imports around 3 million tons annually. Similarly, government intervention has kept urea prices relatively low compared to other fertilizers, such as DAP and MOP. This led to the strong usage of chemical fertilizers in the country. Thus, governments of different countries provide various schemes and enter into separate agreements to encourage fertilizers, which is anticipated to expedite the fertilizers market during the forecast period.

Restraining Factors

Environmental Impacts of Chemical Fertilizers

Excessive use of chemical fertilizers contributes significantly to the emission of greenhouse gases. Excessive application of essential nutrients can have detrimental effects, as a "fertilizer burn" may transpire. This phenomenon involves applying an excessive amount of fertilizer, leading to the desiccation of leaves, impairment of plant health, and potentially even the plant's demise.

In addition, chemical fertilizers are not environmentally friendly, which is another major problem. They penetrate the soil, leading to groundwater contamination and other water sources. Algae blooms are induced when an abundance of nutrients from fertilizer runoff infiltrates aquatic environments. Likewise, rising awareness among consumers regarding the environmental impact of chemical fertilizers and the consumption of the final product produced by using such fertilizers are hindering market growth.

Market Opportunity

Rising Technical Innovations in the Fertilizer Industry

Chemical fertilizers exert a significant influence on the environment, contributing to the occurrence of global warming and climate change. Therefore, a significant chunk of the population and prominent companies concluded that the environmental footprint of fertilizers must diminish, both in terms of production and application, with the development of technologically advanced chemical fertilizers.

• For instance, in 2016, IFDC introduced a UDP technology in Bangladesh, which reduced consumption by 30-35% and increased rice yield by 15-18%.

Moreover, micronutrient deficiency in plants and soil has constantly been increasing and has become a severe issue of concern worldwide. In order to address increasing micronutrient deficiencies in crops, various major players active in the market are involved in R&D and are bringing out new and improved micronutrient products.

• For instance, in 2018, BRANDT bought up new micronutrient formulations, namely Brandt Smart Quatro Plus, which has high-efficiency foliar 5-0-0 with zinc, manganese, boron, and sulfur, and Brandt Smart Mn Plus with high-efficiency foliar manganese, compatible for use with dicamba and 2,4-D herbicides. Therefore, these technological advancements are expected to create opportunities for market growth.

Regional Insights

Asia-Pacific: Dominant Region with A Cagr of 3.8%

Asia-Pacific's fertilizers market size is estimated to exhibit a CAGR of 3.8% during the forecast period. Asia-Pacific dominates the global fertilizers market due to its vast and diverse agricultural landscape and large population. Moreover, the presence of major agricultural economies, such as China and India, plays a crucial role in driving fertilizer consumption. Favorable government policies and initiatives and the adoption of cutting-edge agricultural technologies and practices, such as precision farming and novel fertilizers, also contribute to the region's increased productivity.

Asia-Pacific's status as a major exporter and manufacturer of fertilizer bolsters its market dominance worldwide. The region's competitive advantage in production capabilities and cost-effectiveness enables it to meet domestic and international demand, expanding its market share. The region's growing awareness of sustainable agriculture and environmental concerns has resulted in the development and widespread adoption of eco-friendly fertilizers, further solidifying its dominance in the global fertilizer market.

North America: Fastest Growing Region with the Highest Cagr 3.7%

North America is estimated to exhibit a CAGR of 3.7% over the forecast period. The United States heavily dominates the fertilizer market in North America since the country occupies a major share of 72.5% of the total agricultural land in the region. Moreover, the United States being the biggest and the most advanced economy, most of the multinational fertilizer companies are situated in the country, giving it leverage over the other countries in the region regarding product availability for the farmers and the growers. According to the Fertilizer Institute report, the United States is the world's fourth-largest producer of nitrogen fertilizers.

Country Insights

U.S -Most ammonia in the United States is produced by international companies and utilized for domestic consumption. Consumption of nitrogenous fertilizer accounts for more than half of the total domestic fertilizer consumption in the country. Moreover, In 2019, the United States was the 2nd largest importer of urea and ammonia and the 9th largest exporter globally. Therefore, the United States is the dominant player in the North American region, coupled with the growing population and food security, which is anticipated to drive the global markets steadily in the forecast period.

Europe -Europe is predicted to expand at a substantial rate. Companies are increasingly strategizing to gain competitiveness in the market through the acquisition of local and regional players.

For instance, in August 2015, Sumitomo Corporation acquired a specialty fertilizer business through its subsidiary Sumi Agro Europe Ltd to enhance its micronutrient fertilizers and crop protection chemicals business to generate more sales and revenue. Sumi Agro Europe Ltd operates agrochemicals and crop protection distribution companies, including Sipcam Oxon Group and Agroqualita France SARL in Europe. Similarly, Italy has been facing a scarcity of micronutrient fertilizers, leading the manufacturers to charge high prices. This acted as an impediment to the global market, as it restrained the farmers from increasing the usage of fertilizers.

South America-In South America, the increasing concern of growers to enhance crop productivity in a limited crop-planted area in the country, rising implementation of government interventions such as the National Fertilizer Plan, and a higher proportion of commercial crop production like soybean, sugarcane, coffee, and cocoa in the region will enhance the demand of the fertilizes in the market. In addition, the growing involvement of huge investments by the major companies increased fertilizer consumption by up to 77% in 2018 in Brazil, which may boost the market's growth in the future.

• For instance, in 2022, the Ministry of Economy, Agriculture, Mines and Energy, Infrastructure, and the Special Secretariat for Strategic Affairs, Brazil, formulated a 30-year infrastructure transformation plan to reduce overseas dependency on fertilizers.

Fertilizers Market Segmental Analysis

By Type

The nitrogenous fertilizers segment dominates the global market and is projected to exhibit a CAGR of 2.2% over the forecast period. The nitrogenous fertilizers segment is bifurcated into urea, ammonium sulfate, ammonia, ammonium nitrate, calcium ammonium nitrate, and other nitrogenous fertilizers. The urea segment dominated the market and is expected to grow at a CAGR of 2.7%. Urea is produced as granules, flakes, pellets, crystals, and solutions. It is pelletized or prilled to avoid caking.

Fertilizer use is an integral part of agriculture because of the declining availability of arable land and the increasing role of agricultural commodity exports in the economy. Recent studies identify and recommend using controlled-release urea (CRU) over conventional urea to improve rice grain yield and nitrogen use efficiency. Likewise, urea has always played a significant role in improving grain yield, making urea application necessary. Hence, the demand for urea fertilizers is anticipated to grow consistently over the forecast period.

Micronutrient deficiencies in plants and soil have become a serious concern worldwide, and to address the same, various active market players are investing in R&D to produce new and improved micronutrient products. Studies conducted on some field crops in Egypt in 2017 indicated that micronutrients in mineral or chelated forms were more effective than soil application, except in some special cases, such as zinc sulfate or zinc oxide on rice. Such studies are further increasing the awareness among crop growers, stimulating market growth. Overall, the market growth for the micronutrient fertilizers segment will likely be stimulated by rising soil micronutrient deficiencies and increasing research and development activities by companies and research institutions that will increase awareness in the coming years.

By Application

The grains and cereals segment owns the highest market share and is estimated to exhibit a CAGR of 3.4% during the forecast period. The grains and cereals segment accounts for the larger share of fertilizer consumption. According to the FAO's statistics, in 2020, the area harvested for cereals globally increased from 728,429,452 hectares in 2017 to 736,009,199 hectares. The increase in the available harvest area resulted in the increased usage of fertilizers to improve the yield from the available area. In addition, a few players actively introducing and developing new products for grains and cereals are Yara Company Limited, The Mosaic Company, Nutrien Limited, Sumitomo Chemicals Co. Ltd, and Syngenta AG. Therefore, fertilizers are used globally to improve soil fertility and crop yield to meet the global and domestic demand for grains and cereals. The growing demand for grains and cereals worldwide is thereby projected to propel the growth of this market segment over the coming years.

The major commercial crops grown are rubber, sugarcane, cotton, and jute. Micronutrient fertilizers support the growth of these crops during nutritional soil deficiency. These high-value crops directly impact the economy of regions. Hence, capital investment has been made in large-scale plantations to increase their yields, which is likely to directly impact the micronutrient fertilizers demand from this segment. In addition, sugarcane is commercially cultivated in tropical and subtropical regions, including Brazil, India, the European Union, China, and Thailand. According to the FAO's statistics, sugarcane production increased from 183.5 million tons in 2017 to only 186.9 million tons in 2020. Therefore, more fertilizers and pesticides have been observed in these regions to increase sugarcane yields, which is expected to boost the demand for fertilizers in this segment during the forecast period.