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Advancements in the Asian Fertilizer Market

Published by
World Fertilizer,

Priyanka Khemka, Nexant, details the consumption and capacity developments of nitrogen fertilizers in Asia.

Asia Pacific is the most important region for fertilizer consumption, accounting for over 60% of global demand for nitrogen fertilizers due to the large population and suitability of urea for the climate in the region. Demand growth in Asia Pacific is mainly driven by demand growth in China and India, the two most populous countries in the region.

Consumption in Asia

China is the largest urea consuming country in the world, with one third of total global urea production consumed in the People’s Republic.

Demand for urea is estimated to have been 58 million t in 2017, down from 60 million t in 2013. This decrease was partly the result of a more modest application rate as compared to the over-application in previous years, driven by China’s zero fertilizer consumption policy. About 60% of urea in China is consumed in cereal and oilseeds such as corn, soya bean, and rapeseed production. Industrial applications are the second largest urea consumption sector in China, including melamine, urea-formaldehyde resins (UF), and adhesives, and other industrial uses. The industrial market has been growing along with rapid development of the construction industry, urbanisation, and rising incomes. However, growth is easing with a general slow down in the economy. Ammonium bicarbonate and ammonium chloride are still applied in China due to their on-going availability and usage by farmers. DEF/Adblue is yet a small but fast growing application for urea in China, mainly used in diesel engines to reduce emission of oxynitride.

After China and the US, India is the third largest ammonia consumer in the world, with an estimated demand of about 32 million t in 2017. With little consumption in industrial applications or biofuel fertilizer, 99% of urea in the country is used for direct application for growing food crops. Paddy rice and wheat are the most important crops in terms of nitrogen fertilizer consumption in India. Farmers in India tend to heavily favour urea, as it is cheaper and highly subsidised compared to phosphorous and potassium fertilizers. Indeed, this has resulted in the overuse of urea, which in turn has adversely affected soil quality and crop yield in many regions. To address the environmental implications of urea overuse, and prevent the diversion of urea to the industrial sector, the government has mandated that at least 75% of the nation’s urea production be coated with neem. Concerns over the effect of the over application of fertilizers and its environmental implications is slowing down future urea consumption in India.

Demand for urea in the rest of Asia Pacific, however, has also grown considerably in recent years. Demand in Asia Pacific (excluding China and India) increased from 20.3 million t in 2000 to an estimated 28 million t in 2017. Indonesia and Vietnam are amongst the largest consumers of urea in Other Asia. Consumption growth is mainly driven by urea demand as a direct application fertilizer, which makes up more than 90% of the total urea consumption. Urea consumption for biofuels production accounts for only around 1% of the region’s total urea consumption, but makes up a substantial share of the total urea consumed for biofuels production in some South East Asian countries. Thailand, for example has a significant bioethanol and biodiesel industry, with ambitious growth plans. Industrial applications account for the remaining urea demand.

Indonesia is the third largest nitrogen fertilizer consuming country in Asia Pacific (after China and India), accounting for about 5% of the regional total. In 2017, consumption is estimated to be around 18 million t, with the vast majority (over 80%) used in the synthesis of urea.

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India fertilizer news Pakistan fertilzer news Urea news Ammonia news