Demand for fertilizers in China is forecast to increase 3.3 percent per annum through 2015 to 262 million metric tons. Sales of fertilizers will be supported by healthy expansion of agricultural activities as the amount of sown areas continues to grow and rural income levels rise. Farmers will continue to see steadily increasing incomes, the result of rising crop prices and government subsidies designed to supplement their revenues and reduce their material costs. Subsidies aimed directly at cutting the cost of fertilizers will encourage additional use. However, increasing demand for organic food and improved understanding of the correct application of fertilizers will prevent demand from growing at a faster pace. These and other trends, including market share and product segmentation, are presented in Fertilizers in China, a new study from the Beijing office of The Freedonia Group, Inc., a Cleveland-based industry research firm.
Demand for fertilizer nutrients in China is projected to grow 4.4 percent annually through 2015 to 98.1 million metric tons. Nutrient demand will be driven by increasing use of higher nutrient level products as income levels grow in rural areas in China. In addition, government efforts to promote multi-nutrient fertilizers will also support gains in fertilizer nutrient demand.
Accounting for more than three-fourths of total fertilizer demand in 2010, single-nutrient fertilizers will remain the larger product type through 2015, despite a relatively low growth rate of 2.1 percent per year. Sales of single-nutrient fertilizers will continue to be supported by their relatively low prices. Multi-nutrient fertilizer demand will see strong annual growth of 7.3 percent through 2015, driven by government efforts to promote use.
The size, growth and composition of fertilizer demand in the six regions that make up China vary considerably. The Central-South and Central-East will remain the two largest regional fertilizer markets, together accounting for about 60 percent of total demand in 2015. Due to the comparatively high income levels in the Central-South and Central-East -- which enable residents to afford more expensive food items -- demand for cash crops such as fruits and vegetables will increase in these regions, which in turn will drive demand for fertilizer. Sales of fertilizers in the Northeast and Northwest regions will outpace the average through 2015, benefiting from the Great Western Development Strategy, the Northeast Revitalization Policy and increasing income levels for farmers.
The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.