Nitrogenous Fertilizer Market to Reach USD 111.2 Bn by 2033, CAGR 5.7%

Introduction

The global nitrogenous fertilizer market is witnessing steady growth. It is projected to reach a value of approximately USD 111.2 billion by 2033, up from USD 63.9 billion in 2023, reflecting a compound annual growth rate (CAGR) of 5.7% during the forecast period from 2023 to 2033.

This growth is primarily driven by the increasing demand for food, prompting higher agricultural productivity worldwide. As the global population continues to rise, the need for efficient farming practices and enhanced crop yields intensifies. This leads to higher consumption of nitrogenous fertilizers, which are essential for boosting crop growth.

Additionally, advancements in fertilizer manufacturing processes and the growing adoption of precision farming techniques are further supporting market expansion. However, the market faces several challenges, including environmental concerns associated with excessive fertilizer use, such as soil degradation and water contamination. These environmental issues have led to stricter regulations and a push toward sustainable farming practices.

Furthermore, fluctuations in raw material prices and supply chain disruptions, especially in key fertilizer-producing regions, may pose obstacles to market stability. Despite these challenges, recent developments such as the introduction of slow-release fertilizers and the growing focus on organic farming present new growth opportunities.

The market’s shift towards more sustainable solutions is anticipated to help drive long-term growth, even as it navigates regulatory hurdles and environmental concerns. The continued innovation in nitrogen fertilizer formulations and the integration of digital technologies in farming practices are likely to shape the future landscape of the nitrogenous fertilizer market.

Kynoch Fertilizer has positioned itself as a major player in the African nitrogen fertilizer market, with a strong emphasis on sustainable agriculture. The company’s new product lines, including slow-release fertilizers, cater to the increasing demand for eco-friendly solutions. Kynoch’s expansion into new markets and commitment to innovation will likely enhance its competitiveness in the regional market.

Bunge’s expansion strategy in Latin America through its joint venture with Fertilizantes Heringer is a testament to its ambition to become a dominant force in the nitrogen fertilizer market in emerging regions. With a strong foothold in both agriculture and food production, Bunge’s integrated approach allows it to leverage synergies across its business segments.

Key Takeaways

• The global Nitrogenous Fertilizer Market size is expected to be worth around USD 111.2 billion by 2033, from USD 63.9 billion in 2023, growing at a CAGR of 5.7% during the forecast period from 2023 to 2033.
• Urea, which has 46% nitrogen content, is the most important nitrogenous fertilizer. In terms of revenue, the urea product category accounted for 34% of the largest share in 2023.
• In 2023, the cereals and grains segment had a 46% revenue share. This is due to the highest level of care required by cereals and grain crop types to produce higher yields and generate higher profitability for farmers and the entire agriculture industry.
• In terms of revenue, the APAC region held the largest share, above 64.2%, in 2023. This is due to greater cultivation areas, favorable climate conditions, and a higher number of rural residents.

Nitrogenous Fertilizer Statistics

India’s Fertilizer Subsidy and Urea Trends

• The government of India provided a fertilizer subsidy of over ₹1.30 lakh crore for urea in FY 2023-24. This subsidy aims to support farmers by reducing the cost burden of urea, which is a primary nitrogenous fertilizer used extensively across the country.
• Under nutrient-based subsidy (NBS), expenditure rose to over ₹65,000 crore as against RE of over ₹60,000 crore and Budget Estimate of ₹44,000 crore.
• The total fertilizer subsidy for FY 2024-25 is projected to be around ₹1,95,420 crore, showing a reduction from ₹2,54,798 crore in the previous fiscal year. This indicates fluctuations in government spending on fertilizer subsidies, influenced by various economic factors.
• India achieved approximately 80% self-sufficiency in urea production, which allows the country to meet a substantial portion of its nitrogenous fertilizer needs through domestic production rather than imports.
• The trade value of nitrogenous fertilizers globally was about $60.1 billion in 2022, marking an increase from $38.1 billion in 2021. This growth underscores the rising importance and economic significance of nitrogenous fertilizers in international trade.

Global Nitrogenous Fertilizer Market Insights

• India was the largest importer of nitrogenous fertilizers in 2022, with imports valued at approximately $7.37 billion, indicating a heavy reliance on foreign sources to meet domestic agricultural demands.
• The average retail price (MRP) of a 45 kg bag of urea is set at ₹242, while its actual market cost can exceed ₹3,000 due to various factors including production and transportation costs, demonstrating the financial pressures on both farmers and manufacturers.
• In March 2022, the Commission adopted an exceptional support package worth EUR 500 million to support the producers most affected by the serious consequences of the war in Ukraine. Funds under the crisis reserve of the CAP were used for this purpose.
• On this basis, Member States have provided EUR 492 million of financial support prioritizing farmers engaged in sustainable practices and hardest hit by the crisis.
• Under the agricultural reserve of the reformed CAP, EUR 450 million will be available in 2023 for public intervention and storage measures to stabilize agricultural markets or for exceptional measures that would respond to threats of market disturbance, health risks, or other emergencies as laid down in the Common Market Organisation Regulation.
• Between March and September 2022, the Commission approved 18 agriculture-specific aid schemes with a total budget of about EUR 3.5 billion under the Framework. Three of the schemes are dedicated to farmers’ purchases of fertilizers (total budget of EUR 855 million).
• Most Member States opted for umbrella schemes open to all sectors of the economy (EUR 455 billion in September 2022).

Emerging Trends

• Sustainability and Green Fertilizers: There is a growing push towards more sustainable nitrogen fertilizers. Traditional nitrogen fertilizers, like urea and ammonium nitrate, are energy-intensive to produce and can harm the environment when overused. As a result, researchers and companies are working on creating greener alternatives, such as bio-based nitrogen fertilizers or slow-release formulations.
• Use of Technology to Improve Efficiency: Advancements in technology are helping farmers use nitrogen fertilizers more efficiently. Precision farming technologies, such as drones, sensors, and GPS mapping, can monitor soil conditions and adjust fertilizer applications in real-time.
• Enhanced Efficiency Fertilizers (EEFs): Enhanced efficiency fertilizers (EEFs) are becoming more popular. These fertilizers are specially formulated to release nitrogen more slowly or in response to environmental triggers, like soil moisture or temperature. This slow-release mechanism helps reduce nutrient loss and ensures that plants absorb more nitrogen over a longer period, improving crop yield and reducing environmental harm.
• Regulations and Policy Changes: Governments around the world are introducing stricter regulations on nitrogen fertilizer use due to concerns about environmental pollution and greenhouse gas emissions. This is leading to the development of new policies and incentive programs to promote sustainable agricultural practices. For instance, some countries are imposing limits on nitrogen fertilizer usage, while others are offering subsidies for the adoption of low-emission technologies.
• Integration with Climate-Smart Agriculture: Nitrogen fertilizers are increasingly being integrated into climate-smart agriculture practices. These practices aim to balance food production with environmental sustainability. By optimizing fertilizer use, reducing waste, and combining it with other eco-friendly farming techniques (like crop rotation, no-till farming, and organic farming), farmers can reduce their carbon footprint while still improving yields.

Use Cases

• Improved Crop Yields in Agriculture: One of the most common use cases of nitrogenous fertilizers is to boost crop yields. Nitrogen is a critical nutrient that plants need for growth, especially for producing strong stems, leaves, and overall plant health. By applying nitrogenous fertilizers, farmers can ensure that their crops, such as wheat, rice, and corn, have enough nitrogen to grow and produce higher yields.
• Enhanced Grass and Turf Growth: Nitrogenous fertilizers are often used in lawn care, golf courses, and sports fields to promote the healthy growth of grass and turf. The high nitrogen content helps grass grow more lush and green, improving the aesthetic appearance of lawns and maintaining the health of sports fields.
• Greenhouse and Horticulture Production: In greenhouses and controlled environments, nitrogenous fertilizers are used to ensure optimal plant growth, especially for high-value crops like tomatoes, peppers, and flowers. Since these plants often grow in limited soil conditions, adding nitrogen helps boost their growth, flower production, and fruit yield.
• Soil Fertility Restoration: Nitrogen is a key element that replenishes soil fertility, especially in areas where soil has been depleted of nutrients due to continuous farming. Nitrogenous fertilizers are used to restore the balance of nutrients in the soil, ensuring that crops planted in nutrient-poor soils can still thrive.
• Nitrogen Fixation for Organic Farming: In organic farming, nitrogenous fertilizers are sometimes used alongside natural processes like legume nitrogen fixation. Legumes, such as peas and beans, have the ability to “fix” nitrogen from the air into the soil with the help of bacteria in their root systems. Organic farmers may use nitrogen fertilizers to supplement these natural processes, especially in the off-season, to maintain soil health and ensure that crops receive adequate nutrients.

Major Challenges

• Environmental Pollution and Greenhouse Gas Emissions: One of the biggest challenges with nitrogenous fertilizers is their impact on the environment. When too much nitrogen is applied to crops, it can leach into water systems or evaporate into the atmosphere as nitrous oxide, a potent greenhouse gas. This contributes to water pollution (eutrophication) and air pollution, leading to dead zones in oceans and a rise in global warming.
• Over-Application and Fertilizer Waste: Farmers often apply more nitrogen than needed to ensure good crop growth. However, this leads to over-fertilization, where much of the nitrogen does not get absorbed by the plants and is either washed away by rain or released into the air. This results in wasted resources and higher costs for farmers.
• Soil Acidification: Excessive use of nitrogenous fertilizers, especially ammonium-based ones, can acidify the soil over time. This reduces the soil’s natural pH balance, making it more difficult for plants to absorb other important nutrients like calcium and magnesium. In the long term, this harms soil health and reduces agricultural productivity, forcing farmers to invest in costly soil amendments to correct the problem.
• High Production Costs and Energy Consumption: Producing nitrogen fertilizers is energy-intensive, primarily due to the Haber-Bosch process, which converts atmospheric nitrogen into ammonia. This process requires large amounts of natural gas, making nitrogen fertilizer production expensive and carbon-intensive.
• Nutrient Imbalance and Soil Health: Relying too heavily on nitrogenous fertilizers can lead to a nutrient imbalance in the soil. While nitrogen is important for plant growth, it is not the only nutrient that plants need. Overuse of nitrogen can deplete other essential nutrients, like phosphorus and potassium, leading to poor soil health and lower crop quality.

Market Growth Opportunities

• Development of Eco-Friendly Fertilizers: There is increasing demand for sustainable and eco-friendly nitrogen fertilizers. As farmers, companies, and governments focus on reducing environmental impacts, there is an opportunity to develop bio-based or slow-release fertilizers that reduce nitrogen loss and environmental pollution.
• Adoption of Precision Agriculture: Precision farming technologies, such as drones, sensors, and GPS systems, present a significant growth opportunity for nitrogen fertilizers. By using these technologies, farmers can apply fertilizers more accurately and in real time according to the needs of the crops and soil. This allows for optimized fertilizer use, reducing waste, lowering costs, and increasing crop yields.
• Enhanced Efficiency Fertilizers (EEFs): There is a growing market for Enhanced Efficiency Fertilizers (EEFs), which are designed to release nitrogen in a controlled manner. These fertilizers can significantly reduce nitrogen loss to the environment and improve crop uptake, leading to higher yields with less environmental impact.
• Nitrogen Fertilizer in Developing Countries: In many developing countries, agricultural productivity is still limited due to poor access to modern fertilizers. There’s a huge growth opportunity in introducing affordable nitrogen fertilizers to these regions. As these countries seek to boost food production and improve food security, there is a demand for cost-effective and efficient nitrogen fertilizers that can improve soil quality and crop yields.
• Integration with Climate-Smart Agriculture: As climate change poses a growing threat to global agriculture, there’s an opportunity to integrate nitrogen fertilizers into climate-smart agriculture practices. This involves optimizing fertilizer use alongside other techniques like crop rotation, soil conservation, and water management to adapt to changing climatic conditions.

Key Players Analysis

• Kynoch Fertilizer produces and supplies nitrogenous fertilizers like urea, helping to enhance soil fertility and boost agricultural productivity. They cater to various farming needs, offering reliable products for crop growth.
• Sorfert manufactures nitrogenous fertilizers, including ammonia and urea, which support global agriculture by improving crop yields and soil quality. Their products are key for farmers aiming for better productivity.
• Nutrien Ltd. is a major producer of nitrogenous fertilizers, providing essential products to support global agriculture. They offer fertilizers like ammonia and urea, which enhance soil productivity.
• Bunge Ltd. is involved in producing and supplying nitrogenous fertilizers, including urea, which helps improve agricultural productivity. Their products support farmers worldwide in boosting crop yields.
• Yara International is a leading producer of nitrogenous fertilizers, offering products like ammonia and urea to improve soil quality and crop yields globally. Their innovations support sustainable agriculture.
• Omnia Holdings Limited manufactures nitrogenous fertilizers, providing essential products like ammonium nitrate to support agricultural growth. Their fertilizers enhance soil fertility and crop productivity.
• Sasol produces nitrogenous fertilizers like ammonia and urea, supporting agricultural productivity by improving soil quality and enhancing crop yields. They focus on sustainable farming solutions.
• Aquasol Nutri offers nitrogen-based fertilizers that help boost agricultural growth by improving soil nutrition and enhancing crop yields. Their products focus on sustainable farming solutions.
• TriomfSA specializes in nitrogenous fertilizers like ammonium nitrate, which help enhance soil fertility and support healthy crop growth. They provide solutions for sustainable farming.
• Rolfes Agri (Pty) Ltd. produces nitrogenous fertilizers that improve soil nutrition and promote better crop yields, helping farmers optimize productivity. They focus on sustainable agricultural solutions.
• OCI Nitrogen is a leading producer of nitrogen fertilizers like ammonia and urea, aimed at improving crop yields and soil quality. They focus on sustainable solutions for global agriculture.
• ICL Fertilizers manufactures nitrogen-based fertilizers, offering products that help boost agricultural productivity and soil health. They aim to provide efficient, sustainable solutions for farmers worldwide.
• Eurochem Group AG is a major producer of nitrogen fertilizers, including ammonia and urea, designed to improve agricultural productivity and soil health. Their products support sustainable farming practices worldwide.
• CF Industries Holdings Inc. produces nitrogen fertilizers, including ammonia, urea, and ammonium nitrate, to help farmers improve soil fertility and enhance crop yields. Their focus is on sustainable agricultural solutions.
• Koch Fertilizer, LLC produces a range of nitrogen fertilizers, including urea and ammonia, to improve crop yields and soil fertility. They focus on sustainable agricultural solutions to support global farming.
• Hellagrolip SA manufactures nitrogen fertilizers, including ammonium nitrate and urea, aimed at enhancing crop growth and soil productivity. Their products support sustainable farming practices.
• Coromandel International Limited produces nitrogen-based fertilizers such as urea and ammonium nitrate, aimed at improving soil health and boosting agricultural productivity. Their solutions support sustainable farming practices.
• Haifa Group manufactures high-quality nitrogen fertilizers, including controlled-release products, to improve crop yields and optimize nutrient use. They focus on sustainable, efficient agricultural solutions.
• Notore Chemical Industries Plc produces nitrogen fertilizers like urea and ammonium nitrate to enhance soil fertility and boost agricultural productivity. Their products support sustainable farming and food security.

Conclusion

Nitrogenous fertilizers play a vital role in global agriculture by boosting crop yields. However, their environmental impact requires careful management. Embracing sustainable practices, advanced technologies, and eco-friendly alternatives will ensure a more efficient and environmentally responsible future for fertilizer use.

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