Phosphate Market - Forecast(2021 - 2026)
As per the Food and Agriculture Organization (FAO) of the United Nations, total fertilizer nutrient demand is forecast to reach 201.66 million tonnes by 2020. Right next to nitrogen, phosphate nutrient fertilizer demand is estimated to be 45,858 tonnes, securing the position as second most demanded fertilizer nutrient. Phosphate is a chemical derivative of phosphoric acid and majority of its global production is absorbed by fertilizer manufacturing industries in the blooming agricultural sector. Owing to properties such as flexibility, softness, crack resistant, and water-resistant, phosphate market leveraged many industrial application opportunities. Due to wide applications by end-user industry verticals in carbonated beverages, meat-protein, toothpaste, leavening agents, cleansing agent, insecticides, metal coatings, and water softeners, global phosphate market size is evaluated $69.3 billion in 2018.
Increasing global population is boosting the demand for rapid agricultural production, hence food security is a major concern influencing the phosphate market growth. As the area of arable lands in depleting year on year globally, heavy application of fertilizers is the asylum sought to match the global agricultural output with the surfacing demand. Apart from flourishing fertilizer industry, global consumption of meat is adding further impetus to phosphate market as it applied to meat-protein. FAO states that animal husbandry accounts for nearly 40% of the global agricultural sector. As the trend of packed food products is witnessing global expansion, phosphates are being widely used in meat products to increase the water-holding capacity, diminish cooking loss and enhance textures. As a consequence, opportunities in the global phosphate market is expected to grow at a CAGR of 1.95% during the forecast period 2019-2025.
Phosphate Market Outlook:
After an acute analysis of regional phosphate market share, APAC is reckoned to be the most lucrative region with high phosphate demand from India and China, countries with major agriculture economy. Increasing population in APAC coupled with robust industrialization in China and India has uplifted the uptake of F&B, pharmaceuticals, fertilizers and personal care products. As phosphate finds application in all of the mentioned verticals, APAC generated a substantial 45% of the global phosphate demand in 2018.
Agricultural fertilizers are dominant source of demand for phosphate in APAC. Fertiliser Association of India (FAI), stated that modern Indian agriculture sector contributes approximately 17% to India’s GDP as of 2018. Moreover, as per Organization for Economic Co-operation and Development (OECD), China has 21% of global population in its territory along with 9% of universal arable land. Hence, with agriculture being a core constituent of economy in APAC regions, phosphate imports are also dominating the market. In 2018, India was the leading region, with 27.5% of world imports for natural calcium phosphates and natural aluminium calcium phosphates.
On the basis of application, global phosphate market is segmented into fertilizers, feed and food additives, industrial, detergents, water treatment and metal treatment. Further analyzing the application segment on the basis of revenue and application growth, fertilizer segment is evaluated to be the fastest growing application industry progressing with an application CAGR of 2.10% going through 2025. Fertilizers market is gaining traction due to increase in agricultural spending and growing demand for high quality cultivated crops. Moreover, governmental subsidies to improvise agricultural economy and assist farmer in purchasing farming related commodities is also supporting the fertilizer market growth, consequently benefiting the phosphate market growth. For example, in 2018 the World Bank Group, leading financier of agriculture had $ 6.8 billion allocated for IDA (International Development Association) commitments.
Phosphate Market Growth Drivers:
· Calcium phosphate derived from phosphate rocks are used in manufacturing of nutritional supplements for animals. Hence, growing animal feed additive market and cattle feed market are supporting the global demand for animal based protein; and act as a driving force, adding impetus to global phosphate market size. As animal based food products are an imperative resort sought globally to counter food security, phosphate market is capitalizing the application in this vertical.
· High usage of phosphate in F&B sector is elevating its application prospects. It is found in protein rich food including eggs and fish. It is used as an added substance for preserving meat for longer duration, supplementing shelf-life of products in meat industry. Wide utilization of phosphate as thickening agent confectionery has uplifted the phosphate demand in food processing industry.
· Governmental subsidy on phosphate fertilizer is increasing the purchasing power of agriculturalists hence, uplifting demand of phosphate. Government of India passed Fertilizer Control Order (FCO) under Essential Commodities Act (EC Act) in 1957 to control sale, pricing and quality of fertilizers. No subsidy seems to have been paid on fertilizer before 1977 except subsidy on phosphate due to its volatile costs in the international market. As India is the second largest consumer of fertilizers, FAI estimates that through subsidy the savings of farmers during 2007-2018 has been more than $192 billion. To further highlight the importance of subsidy, Indian fertilizer industry collects 50% of its revenue from the government sector. Similar measures are taken globally that positively influence the application of phosphate.
Phosphate Market Players Perspective:
Some of the key players operating in the global phosphate market are CF Industries holdings Inc., The Mosaic Company, S.A. OCP, PJSC PhosAgro AG, EuroChem, Agrium Inc., Potash Corporation, Saudi Arabian Mining Company, Innophos Holdings, Inc., Israel Chemicals Ltd., and Jordan Phosphate Mines Company.
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