Source: vinachem.com.vn
After decreasing for 2 consecutive years, the total global fertilizer consumption (N +P2 O5 +K2O) in 2023 increased by 4% and estimated to increase by 3% in the fiscal year 2024. 203.7 million tons of nutrients in the fiscal year 2024, increased slightly compared to the fiscal year 2020. This recovery can be explained mainly thanks to the fertilizer price decreased after peaking in May 2022. In the second half of 2022 and the first half of 2023, the price of fertilizer has decreased significantly for cereal farmers (except for rice) and crops to get oil, then keep stable in the second half of 2023. In the first quarter of the first quarter /2024, the price of nitrogen fertilizer and phosphorus for grain farmers dropped lower than the beginning of 2023, but the price of potassium fertilizer decreased even lower, especially for farmers to grow oil.
Due to changes in exchange rate, shipping costs and domestic regulations, although global fertilizer prices show the downtrend, the price in the international market does not always reflect the price that Farmers must pay in reality. Moreover, in many countries, interest rates continue to maintain at a high level, affecting the financial situation of farmers and the ability to buy input agricultural materials.
The recovery of the global fertilizer market took place in the context of the strong El Nino phenomenon from mid -2023 to April 2024. This climate has significantly affected the 2023/2024 season in the Southern Hemisphere countries, including the harvested places in the first half of 2024. Serious drought weather caused damage to the annual crop. Coc and oil trees in the Midwestern Brazil and South Africa as well as the crop of rice and palm crop in Southeast Asia. El Nino also brings the expected rains to AC-Hen-Na and southern Brazil. In the northern hemisphere, spring weather is generally favorable for winter crops and new sowing in the second quarter of 2024, but the situation in northern Europe is more complicated.
Preliminary forecasts of the US Department of Agriculture in May 2024 showed that the grain growing area in the US was stable in the 2024/2025 crop, while the rice growing area increased slightly and compensated for the decreasing maize area. . On the contrary, the soy planting area is expected to increase in the 4th consecutive year. As a result, the ratio of inventory/ consumption of soy is improved, while the inventory/ consumption rate is tight. At the end of May 2024, the probability of the La Nina phenomenon increased for the second half of 2024, just 1 year after this phenomenon happened for 3 consecutive years.
The decline and later recovery of fertilizer consumption in the global market did not divide evenly to the three main nutrients. K2O consumption decreased by 6.2 million tons (-15%) during 2020-2021, followed by P2 O5 by 4.2 million tons (-9%) and N decreased by 2.7 million tons (-2% ). It is expected that the motivation for the market recovery is N with an increase of 5.5 million tons (+5%), while K2O increased by 5.4 million tons (+16%) and P2O5 increased by 3.3 million. tons (+7%). As a result, in the fiscal year, 2024 consumed N will increase by 2% compared to 2020, while consuming P2 O5 and K2O still decreased by 2%.
The growth motivation is Latin and East Asia
Over 4 years from the peak of the global fertilizer consumption last time to the peak of the next consumption, fertilizer consumption in Latin America and East Asia estimated to increase each area of more than 2 million tons. On the contrary, the consumption of fertilizer in West – Central Europe and South Asia is estimated to decrease by 2 million tons and 1.1 million tons respectively. Among the areas with lower fertilizer consumption, Africa estimates to increase consumption by 0.5 million tons, but the consumption in Oceania and Eastern Europe – Central Asia decreased by 0.6 and 0. , 4 million tons corresponding. In North America and West Asia, the consumption of each area is expected to increase below 200,000 tons.
Potassium fertilizer is a growth motivation for fertilizer consumption in Latin America but it is also the main cause of consumption decline in South Asia, while phosphorus accounts for the majority of fertilizer consumption in the East. A. In Western – Central European countries, all three types of nutrients are expected to decrease.
Latin America: Fertilizer consumption in 2023 partially recovered in the context of La Nina phenomenon
The consumption of fertilizer in Latin America in the period of 2020-2024 is expected to increase by 8%, mainly reflecting the increase of agricultural production. During the period between the 2020222 and 2024/2025 crops, the soy production in South America expected to increase by 18%, the corn production increased by 25%, largely thanks to the increase in cultivated area. In Brazil, the largest fertilizer market in the area, the area of soy, sugar and cotton cultivation has increased in the crop of 2023-2024. At Achentina, the planting area is expected to be planted and the cereal harvest is strongly recovered after 3 consecutive times the La Nina phenomenon occurs. In Mexico, government support for fertilizers (Urea and DAP) has increased significantly in recent years, thereby reducing the impact of high fertilizer prices in the international market.
China: Partial nitrogen consumption
China accounts for 24% of global fertilizer consumption in the fiscal year 2023 and 75% of the consumption in East Asia. Recently, China has experienced a trend of fertilizer use. The consumption of nitrogen fertilizer here decreases evenly in 2014-2021, with an average reduction of 4%, the reason is that the government’s policy for reducing too much fertilizer consumption. However, from the fiscal year 2021 consumption has returned to the trend of growth thanks to the focus on domestic food security and agricultural benefits of the Government.
After decreasing in the fiscal year 2021, K2O consumption in China has also recovered, supported by decreased potassium fertilizer prices and further growth in fruit production as well as green vegetables. In parallel with that, the Chinese government has continued to request to strengthen the efficiency of fertilizer use.
India: The strong government’s support for nitrogen fertilizer and phosphorus
South Asia has reduced fertilizer consumption during 2020-2024, of which India plays the main role and accounts for 80% of the region’s consumption. This consumption decline is mainly due to lower K2O consumption. Since 2022, the Indian Government has increased support for phosphate fertilizers through the subsidy program by fertilizer with the purpose of reducing the impact of fertilizer price increase in the international market. The government also continues to subsidize Urea with the regulation on maximum retail prices lower than international prices. Meanwhile, potassium fertilizer is only supported at a minimum. As a result, the consumption of two types of nitrogen fertilizer and phosphorus in 2024 is expected to return to the level of 2020, but the potassium consumption will be lower.
Western Europe and Central Europe: Fertilizer consumption has not fully recovered
The West – Central Europe is expected to reduce fertilizer consumption at 12% or 2 million tons during the 2020-2024 period. P2 O5 and K2O consumption are partially affected, with a decrease of 17% (0.5 million tons) and 22% (0.7 million tons) respectively. Consumption N is expected to only decrease by 7% (0.8 million tons). Many farmers in the area prioritize the use of nitrogen fertilizer to maintain the harvest production, but reducing the consumption of P2 O5 and K. Farmers in this area are facing difficult circumstances in recent years. : In addition to the high price of input materials, the weather in the area has fluctuated strongly, rain too much (Northern Europe) or too little (Southern Europe). After the severe drought in 2022, the weather was unstable in 2023 and rain in early 2024.
In addition, the regulations on the use of nitrogen fertilizer have been implemented recently in some leading countries in the region and are being discussed in other countries. The expansion of the organic cultivation area also continues to contribute to reducing inorganic fertilizer consumption.
