What is the Scenario of Asia Complex Fertilizer Market?
Asian countries are behind US and European countries in terms of achieving agricultural crop yield. The focus on improving crop yields has driven the demand for complex fertilizers in the Asian subcontinent over the past decade. Asia complex fertilizer market registered moderate growth during 2012-2017, growing at a CAGR of ~%, to register revenues worth USD ~ billion in 2017 as compared to USD ~ billion in 2012. Moderate growth was due to decline in consumption of complex fertilizers in certain key territories and slump in price of complex fertilizers, driven by decline in cost of raw materials in international markets. Overall, complex fertilizer production in Asia grew at a CAGR of ~% during 2012-2017, whereas consumption of complex fertilizers grew at a CAGR of ~% during the same period.
Thailand was the largest consumer and producer of complex fertilizers in Asia and accounted for about ~% of the market in 2017.
India ranked second and comprised for ~% of the market share in 2017. Vietnam, Indonesia and Thailand were other major countries utilizing complex fertilizers in Asia and accounted for ~%, ~% and ~% market share respectively in 2017. All other Asian countries together comprised for remaining ~% of the market.
NPK 16-16-8 was the most widely used complex fertilizer in Asia and accounted for ~% market share in overall complex fertilizer market in 2017. NPK 20-20-15 was the next popularly used fertilizer grade and comprised for ~% market share in 2017. NPK 15-15-15 and NPK 20-20-0 were other popularly used complex fertilizers which comprised for ~% and ~% market share respectively in 2017. All other grades/formulas of complex fertilizers together comprised for about ~% of the market share in 2017.
How has Thailand Complex Fertilizer Market Performed?
The fertilizer consumption in Thailand has remained at low levels as compared to other Asian countries such as China, India, Vietnam and Indonesia. However, inclining population and food demand has resulted in increase in consumption of complex fertilizers in the country. Despite rise in demand, Thailand has not been able to achieve sufficient production levels of complex fertilizers. Thus, imports play a crucial role in the Thailand complex fertilizer industry. Production capability is very limited with most of the straight fertilizers being imported in the country and used for bulk blending. Urea accounted for about 50% of overall fertilizers consumption in the country.
Decline in land area suitable for agriculture and deterioration of soil quality in cultivated land have resulted in a steady increase in the use of chemical fertilizers in the recent past. Raw materials for manufacturing complex fertilizers are almost entirely imported by the country due to lack of necessary raw materials domestically. In fact, a substantial amount of complex fertilizers sold in the country are imported in finished form. The domestic manufacturing capability for complex fertilizers is very limited.
Complex fertilizers worth USD ~ million were sold in the country in 2017 as compared to USD ~ million in 2012, representing growth at a CAGR of ~ during the period 2012-2017. The market witnessed a slowdown in revenue growth during the last three years due to erratic monsoons and decline in price of complex fertilizers in the country.
Thailand imported about ~ thousand MT of NPK fertilizers during 2016, majorly from Russia, Norway and Finland. Imports declined in 2016 by as much as ~% as compared to 2015. Decline in domestic demand due to erratic monsoon and low consumer enthusiasm resulted in a decline in imports of the same in 2016. Overall, imports declined from ~ thousand MT in 2013 to ~ thousand MT in 2016.
Russia, Norway and Finland were the largest exporters of NPK fertilizers to Thailand as of 2016, contributing about ~%, ~% and ~% of the overall NPK imports of the country (in terms of volume). China, Netherland and Germany were other major exporters and accounted for ~%, ~% and ~% of the total NPK imports in 2016.
Which Segments Have Outperformed?
NPK 15-15-15 was the most widely used complex fertilizer in Thailand since it is priced comparatively cheaper and contains a balanced primary nutrient content. The usage of this particular NPK fertilizer has grown at the fastest pace during the last 5 years. NPK 15-15-15 comprised for about ~% market share in the overall complex fertilizer market in Thailand in 2015.
NPK 16-16-8, NPK 16-8-8 and NPK 10-10-16 were other popularly used fertilizer grade which comprised for ~%, ~% and ~% market share respectively in 2017. All other grades/formulas of complex fertilizers together comprised for about ~% of the market share in 2017.
Consumption of three-nutrient NPKs was much higher than that for two-nutrient NPKs in Thailand.
Complex fertilizers in Thailand were majorly utilized for cultivation of cereals and comprised for about ~% of the market share in 2017, in terms of consumption volume. Fruits and vegetables, Oilseeds and all others accounted for ~%, ~% and ~% market share, respectively.
Thailand largely produced, imported and utilized blended complex fertilizers due to low investment required for companies for set up a blended manufacturing facility. Consumption of blended fertilizers stood at ~ Million MT in 2017, comprising for ~% market share of overall complex fertilizer consumption in the country. On the other hand, consumption of granulated or fused complex fertilizers stood at ~ Million MT in 2017 which accounted for ~%market share of the overall complex fertilizer market in Thailand.
Thailand’s chemical fertilizer market is highly competitive with top 5 players comprising over ~% of the market share, in terms of revenue in 2017. The market is largely import based with very limited domestic manufacturing capabilities. Raw materials are almost entirely imported in the country. As a result, some of the leading European countries have resorted to importing and distributing complex fertilizer products in the country rather than setting up production units. Traders largely imported finished fertilizers and subsequently marketed them.
Thai Central Chemical Public Company was the largest players operating in this space. It imported majority of the raw materials and produced both granulated and blended complex fertilizers. As of 2017, the company had ~% market share in the overall complex fertilizer market, in terms of revenue. Yara International, ICL Fertilizers and Chia Tai were other leading players in this sector. All these companies do not have any manufacturing facility in Indonesia and only imported and supplied complex fertilizers to the domestic market. Yara, ICL and Chia Tai accounted for ~%, ~% and ~% market share in 2017, respectively. Terragro Fertilizer Company had manufacturing unit for complex fertilizers in Thailand and comprised for ~% market share in 2017.
What are the Growth Prospects of Thailand Complex Fertilizer Market?
Despite dependence on external factors such as machinery, raw materials and energy, Thailand’s complex fertilizer industry will remain just as indispensable to the future of economic development as it has been during the past decades. Thailand, after all, is an agricultural country. Besides, its fertilizer use per hectare of land is still well below other Asian countries.
Thailand will continue to be reliant on imports in order to meet the domestic demand of complex fertilizers. However, increasing government’s focus to reduce dependence on imports could result in setting up of manufacturing plants in the near future.
Most manufacturers produced low quality blended complex fertilizers in Thailand since almost all raw materials are imported. However, steady rise in production of complex fertilizers is expected in the mid-long term. Complex fertilizers market is anticipated to be worth USD ~ million by 2022 growing at a CAGR of ~% during the period 2017-2022.
Average selling prices of NPKs are most likely to improve 2018 onwards owing to recovery in agricultural commodities’ prices and rise in prices of raw materials.
Ken Research estimates the consumption of complex fertilizer to grow at a CAGR of ~% in the next five years, rising from ~ million MT in 2018 to ~ million MT in 2022. Furthermore, production of complex fertilizers is expected to grow at healthy CAGR of ~% during 2017-2022, inclining from ~ million MT in 2018 to ~ million MT by 2022.
NPK 15-15-15 was the most widely used complex fertilizer in Thailand, recording fastest growth during the last 5 years. Going forward, utilization of NPK 15-15-15 is most likely to remain strong owing to balanced nutrient composition and comparatively cheaper prices.
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Ankur Gupta, Head Marketing & Communications
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