Organic Fertilizers Market Overview
The organic fertilizer market size is forecasted to reach US$12.5 billion by 2027 after growing at a CAGR of 10.2% during the forecast period 2022-2027. Organic fertilizer is consequent from organic sources like animal manure and seaweed extracts. Organic fertilizers industry uses organic compost that have to be derived from all-organic sources. The use of these nonconventional fertilizers may result in an increased relative economic benefit with respect to the use of conventional methods which uses worm casting as one of the ways for fertilization. Organic farming has the potential to provide advantages in terms of environmental protection, conservation of non-renewable resources, improved food quality, reduction in output of extra product, and reorientation of agriculture towards the change in market demand. In addition to releasing nutrients, as organic fertilizers break down, they improve the structure of the soil and increase its ability to hold water and nutrients. The growth for organic fertilizers is driven by increased production of biofuels, food and nutrition security, environmental concerns and organic production. Moreover, increasing agriculture farmland around the globe has further boosted the market demand of the organic fertilizers industry.
The COVID-19 pandemic has challenged the organic fertilizers industry drastically in 2020. In comparison to other industries, organic fertilizers market had a negative impact on overall growth. Since the beginning of 2020, the global economy has been experiencing a downturn with the outbreak of the COVID-19 pandemic. The outbreak of COVID-19 is anticipated to have a significant effect on production and distribution of fertilizers. Logistics are disrupted in various regions of the world which has impacted industries in different sectors such as agriculture and others. With the decrease in global demand, the prices of organic fertilizers products have started to decline across the globe owing to sudden holds put on the buying of these products amidst the coronavirus (Covid-19) Pandemic. Thus, the decrease in the demand in the agriculture industry is accounted to hamper the growth of organic fertilizers industry.
The “Organic Fertilizers Market Report – Forecast (“2022-2027”), by Industry ARC, covers an in-depth analysis of the following segments of the organic fertilizers industry.
By Plant Type: Plant
Based (Compost, Cottonseed Meal, Alfalfa Meal, Molasses, Seaweed Extract,
Others) Animal Based (Manure, Blood Meals, Bone Meal, Bat Guano, Fish Meal and
others) Minerals (Limestone, Greensand, Rock Phosphate, and Others) and Others.
By Form: Liquid, Solid (Granules, Powder, Pellet, Others)
By Application Method: Foliar Spray, Soil Application and Others.
By Packaging Type: Plastic Bags (Retail Packing and Bulk Packing), Paper Bags, Can, Bottle and Others.
By Crop Type: Cereals & Grains, Oilseeds & Pulses, Fruits & Vegetables, Turf and Ornaments, Cash Crops (Flowers, Cannabis, Grass and Others)
By Geography: North America (U.S, Canada, and Mexico), Europe (UK, France, Germany, Italy, Spain, Russia, Netherlands, Belgium, and Rest of Europe), APAC (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, Rest of South America), and RoW (the Middle East and Africa).
- The organic fertilizers market size is increasing due to high demand for foliar spray and in soil application.
- The Asia Pacific region holds a dominant market share in the organic fertilizers market due to the high demand generating from plant and animal-based fertilizers.
- The demand for organic fertilizers is increasing due to strict rules and regulations set by the government for reducing the negative effect of chemical fertilizers on the crop, and it is expected to grow organic fertilizers market in the coming years.
Figure: Asia-Pacific Organic Fertilizers Market Revenue, 2021-2027 (US$ Billion)
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Organic Fertilizers Market Segment Analysis- By Type
Plant based fertilizers held the largest share of over 46% in the organic fertilizers market in 2021. Plant-based fertilizers work best in biologically active soil that is regularly enriched with compost, cover crops and decomposing mulches. Plant based fertilizers improve garden soil where they are used. They not only assist with water retention; they also make the soil lighter so that more air is available to the plant roots. Plant based fertilizers don’t waste nutrients like their chemical counterparts. These types of fertilizers even tend to be less likely to burn tender plant roots than synthetic products. The slow working nature of these plant-based fertilizers is beneficial to improve the garden soil over time. According to United States Department of Agriculture (USDA), estimates India rice production for marketing year 2021/22 will record 129.0 million metric tons and up to 3 percent production increased from last month. Therefore, plant-based fertilizers are going to remain the dominant segment in the organic fertilizers market throughout the forecast period as it being used in the agriculture sector, thus it will continue to drive the market growth of organic fertilizers industry.
Organic Fertilizers Market Segment Analysis- By Application Method
Soil application held the largest share of over 62% in the organic fertilizers market in 2021. Organic fertilizers use soil application as a popular method used in the farming. Soil application requires organic fertilizers which is derived from plant & vegetable residues, animal matter & animal excreta or mineral sources. Soil fertilization have complex biological structure. They take time and help of organisms present in soil to break down to simpler nutrient molecules. Soil application are ideal for a wide range of crops which includes cereals & grains and oilseeds & pulses. Increased organic farming practices and growing awareness about the benefits of using organic fertilizers are the major factors driving the market growth for the organic fertilizers industry. According to Forbes, in India, global smart farming market was set to grow at a compound annual growth rate of 13.27% to reach US$12 billion by 2021 end. Thus, use of organic fertilizers in the agriculture sector, will bolster the market growth for organic fertilizers during the forecast period.
Organic Fertilizers Market Segment Analysis – By Geography
Asia Pacific dominated the organic fertilizers market in 2021 with a market share of around 35%, followed by Europe and North America. Asia-pacific is expected to witness the fastest growth in the global organic fertilizers owing to the fact, that the fertilizers for fruits, vegetables, and tea are accounting for major amount of share from China. In addition, increasing disposable income and growing awareness regarding the benefits of organic food are also supplementing the market growth in this region. Rising demand for food products, increased investments in modernisation, and growing disposable income in the region driving demand for agriculture products are expected to result in robust growth. The growing adoption of advanced and sustainable organic farming practices among farmers due to rising environmental concerns is further anticipated to augment the market growth of organic fertilizers over the forecast period. Asia-Pacific is estimated to govern the market during the forecast period due to the high growth of various end-use industries. China and India being the major countries offering lucrative growth opportunities over the forecast period. Thus, rise in demand for fruits & vegetables, turf and ornaments, cash crops, flowers, cannabis and others from the Asia-Pacific region will continue to drive market growth for organic fertilizers industry.
Organic Fertilizers Market – Drivers
Growing demand from agriculture sector
Organic fertilizers are made up of natural substances that are sprayed or added to crops to increase their productivity. They are the fertilizers that are obtained from natural sources like plants and animals. Organic fertilizers are very beneficial as it enriches the soil with carbonic compounds which are essential for the growth of the plant. Organic matter is also increased in plants if organic fertilizers are used which promotes the reproduction of microorganisms and also helps in changing the physical and chemical properties of soil. With the availability of limited arable land demand for quality yield production on the farm is fuelling the demand for organic fertilizers. Organic fertilizers are major in modern agriculture and home gardening. This is expected to present potential growth opportunities to the market over the forecast period. The scarcity of land for producing food will further create demand for specialized fertilizers such as for food due to a growing population. According to Ministry of Agriculture & Farmer’s welfare, total oilseeds production in India during 2019-20 was estimated at 33.42 million tonnes which is higher by 1.90 million tonnes than the production of 31.52 million tonnes during 2018-19. Thus, use of organic fertilizers in the agriculture, will continue to drive the global market for organic fertilizers market.
Growing demand for organic farming
Due to the growing environmental concern like use of excessive use of chemical fertilizers and pesticides have made the land barren due to which many companies are moving towards organic farming and cost minimization in the agriculture sector which is driving demand globally. Stringent regulatory framework on conventional fertilizers, concerns about using chemical fertilizers which makes the land barren have made many companies to switch for plant-based fertilizers. According to the Ministry of Commerce India's agricultural product exports is expected to cross the mark of US$50 billion for the financial year FY22. Thus, use of plant-based fertilizers in agriculture, will continue to drive the market for organic fertilizers industry.
Organic Fertilizers Market Challenges
Availability of substitutes
Availability of substitute product or a potential replacement product like chemical fertilizers or synthetic fertilizers in a certain market segment, will hamper the market growth for organic fertilizers. The price of organic fertilizer equipment will be transparent, and buyers will try to lower prices and put higher quality and service. The requirements, and the competition of competitors, all of which will cause the loss of the profit of the seller of organic fertilizer equipment. As the price of organic fertilizer equipment becomes transparent, organic fertilizer equipment will slowly lose its appeal to potential customers and suppliers. Thus, putting a major for the growth of organic fertilizers. The high cost associated with this fertilizer has limited its use on large scale agricultural production such as the production of commodity crops. This is projected to hinder the market growth of the organic fertilizers over the forecast period.
Organic Fertilizers Market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the market. Organic fertilizers market top 10 companies are:
- Fertikal N.V.
- Bio Nature Technology PTE Ltd.
- National Fertilizers Limited
- Biofosfatos de Brasil
- BioSTAR Organics
- California Organic Fertilizers
- Multiplex Group
- Italipollina SPA
- In march 2021, Haifa Group signed an agreement with AgrIOT. According to the agreement with AgriOT, Haifa will invest in AgrIOT for around $2M against nearly 30% of the company and also in global exclusive distribution rights.
- In January 2020, ChemChina and Sinochem have announced a mega-merger of their agricultural assets into a new holding company to be called Syngenta Group. Syngenta Group will acquire major agricultural assets from Sinochem according to the announcement.
- In 2019, Biostar Organics, part of BioStar Renewables, announced the commissioning of its first OMRI-listed, SuperSix organic liquid fertilizer plant, located in Othello, WA. In collaboration with Sheboygan Falls.
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