Global Fertilizer Demand to Reach 415 Million Metric Tons in 2014

World demand for fertilizers is projected to increase 3.8 percent per year to 415 million metric tons in 2014.  These gains will reflect an upswing from sluggish growth registered during the 2004 to 2009 period, as individuals reinvest in fertilization programs after reducing their input costs due to high prices and credit issues during 2008 and 2009.  A growing global population, increasing consumption of high-protein products that require fertilizer intensive grains, greater crop requirements for biofuel production and shrinking amounts of arable land will require farmers to improve crop yields, providing opportunities for fertilizers.  These and other trends, including market share and product segmentation, are presented in World Fertilizers, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Agriculture continues to dominate the fertilizer market.  Record high raw material costs pushed fertilizer prices upwards during 2008 and parts of 2009.  High input costs, in addition to volatile crop prices and a global recession, led farmers to try to keep operating costs in check, in part by reducing or postponing fertilizer applications during 2008 and 2009, particularly phosphate and potash types.  In general, fertilizer demand was impacted the most in countries where credit markets tightened due to the global recession and where fertilizer purchases are dependent on debt financing.  In 2010, recessionary conditions began to subside, freeing up available credit, and farmers in many parts of the world began to reinvest in fertilizers to increase crop yields.  Demand for fertilizer-intensive crops and pricing moderation will also benefit fertilizer use, particularly for phosphate and potash types.  In addition, multi-nutrient and organic fertilizers will benefit as farmers shift toward more balanced nutrient delivery systems.  Growth in organic food production will provide opportunities for organic fertilizers.

A turnaround in the US housing market, as well as continued consumer enthusiasm for lawn and garden care and a renewed interest in food gardening, will drive gains in the smaller consumer and commercial fertilizer markets.  Despite favorable growth, the consumer and commercial fertilizer markets combined will continue to account for less than two percent of the global market.  Asia/Pacific will continue to control the largest portion of fertilizer demand, primarily due to its enormous agricultural sector.  Above-average gains in fertilizer use will be attributable to the need for higher crop yields on less arable land in order to feed a growing population.  Central and South America and Eastern Europe are also projected to offer above-average growth opportunities through 2014.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.