Post COVID-19, the NPK fertilizers market size is estimated to grow from USD 87.2 billion in 2020 and projected to reach USD 88.7billion by 2021, at a CAGR of 1.8% from 2020 to 2021. The major factors driving the growth of the market include increasing reliance on fertilizers for crop productivity enhancement and rising crop demand for animal feed production. With the COVID-19 outbreak, NPK fertilizer manufacturing companies are becoming more aware of techniques and strategies to cope up with the situation. This, in turn, is projected to lead to an increase in demand for fertilizers, especially as the market growth starts stabilizing.
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On the other hand, factors such as disruptions in the supply chain and the lockdown imposed by several countriesare restraining the growth of the NPK fertilizers market. However, the challenging scenario creates opportunities for local players to operate within the national boundaries. They can opt for local or domestic sources of raw materials, as several countries have imposed trade restrictions, which, in turn, affect global logistics and transportation.
By nutrient type, the potassium fertilizers segment is projected to witness the highest CAGR during the forecast period. Potassium is an essential nutrient required for plant health. When the potassium supply is limited, plants have reduced yields and are susceptible to pest and disease damage. The most commonly used potash fertilizers include muriate of potash (potassium chloride) and sulfate of potash (potassium sulfate). The COVID-19 outbreak has weakened the prices of potash fertilizers due to subdued demand in China and Southeast Asia.
By crop type, the cereals & grains segment accounted forthelargest share of the NPK fertilizers market in 2019. Wheat and other cereal crops are consumed as astaple food across the world. According to the FAO, approximately 60% of the corn cultivated across the globe was used as feed in 2016.New rice export contracts have been suspended in Vietnam, while the lockdown in India, the world’s leading rice exporter, has severely curtailed shipments. Rice trade has also been impacted by the shortage of containers, the preferred method of shipping high-value grains, following a sharp fall in containerized exports from China.Furthermore, the heavy consumer purchasing seen at the outbreak of the pandemic is likely to have receded following a build-up of household stocks of cereals & grains, which could also ease localized demand pressures.
Asia Pacific is estimated to account for the largest share of the NPK fertilizers market during the forecast period. This region comprises developing countries with vast agricultural lands. The per capita income of the region depends on agricultural activities. According to the FAO, in 2018, Asia Pacific was the largest consumer of fertilizers in the world. The share of Asia in world consumption of nitrogen is 62.1%, phosphate 57.6%, and potash 46.4%. Additionally, agricultural technologies are widely accepted and practiced in this region. According to the World Bank, about 56.2% and 60.4% of the entire land area were accounted for as agricultural land in China and India, respectively, in 2016. The major crops produced in this region include rice, sugarcane, sugar beet, fruits & vegetables, and other cereals & grains.