Globally, a recovery agricultural commodity prices is expected to push up demand for fertilizers. Between August 2023 and February 2024, the IMF’s food and beverages price index gained 6.0 percent, masking heterogeneity. Prices for cereals and vegetable oils continued to decline, by 7.2 percent and 10.9 percent, respectively, on the back of abundant global supplies. Concerns related to El Nino put upward pressure on the prices of certain tropical crops, including cocoa (64.2 percent) and coffee (18.2 percent). Coffee prices, especially those for Robusta, experienced upward price pressure from tensions in the Red Sea, which led some consumer countries to switch from Asian to Brazilian imports.

Trade restrictions already had stymied the flow of fertilizer before the invasion of Ukraine. In 2021, the year before the conflict started, the European Union (EU) and the United States imposed sanctions on imports of potash from Belarus, and China imposed a ban in July 2021 on their exports of phosphates to preserve domestic fertilizer supplies. In February 2022, after Russia’s invasion of Ukraine, the EU imposed sanctions on individual oligarchs who owned fertilizer industries and on Russian potash. It also restricted the transit of fertilizer through EU territory. Canada placed a 35-percent tariff on Russian fertilizers in March 2022. At the same time, Russia prohibited the export of ammonium nitrate fertilizers until May 2022. On the other hand, the United States, seeking to avoid fertilizer supply shortages and price increases, did not impose sanctions on Russian fertilizers.

Organic Fertilizers To Dominate Proceedings

According to a latest update from Spherical Insights, the global organic fertilizers market size is to likely to grow from USD 9.9 Billion in 2023 to USD 19.5 Billion by 2033, at a Compound Annual Growth Rate (CAGR) of 7.01% during the projected period. Organic fertilizers are nature-based fertilizers that contain a moderate amount of plant essential nutrients, one of the revolutionary components of sustainable agricultural practices, tackling soil fertility depletion. It is manufactured by composting and fermentation processes which stimulate microbes that decompose organic matter, releasing nutrients such as phosphorus, nitrogen, and potassium. It typically contains animal waste including meat processing waste, manure, slurry, and guano, and other plant-derived fertilizers such as compost and biosolids. The improvement in the quality of agricultural products with the fulfillment of international standards and customer preferences is enhancing the organic fertilizer market. On the contrary, changing climate affects the temperature and sea levels restraining the market growth.

In India too, in her this year’s Interim Budget speech, Finance Minister Nirmala Sitharaman had noted that after the successful adoption of nano-urea, application of nano-DAP on various crops will be expanded in all agro-climatic zones. India will replace the consumption of 2.5 million tonnes (mt) of conventional urea with nano urea in FY24, union chemicals and fertilisers minister Mansukh Mandaviya had noted. This is in line with India’s goal of achieving self-sufficiency in urea production by 2025.

Outlook:

Global fertilizer prices are currently witnessing some moderation. The Green Markets Weekly North America fertilizer price index had hit a one year high of 609 in mid-March 2024 before pulling back and eased to 501 in first week of May 2024, marking lowest level in nearly ten months. Prices had edged up as continued attacks in the Red Sea and the ongoing war in Ukraine risk.