Market Trends of GCC Organic Fertilizer Industry
This section covers the major market trends shaping the GCC Organic Fertilizer Market according to our research experts:
Increasing Focus on Organic Farming Practices
The rising demand for organic products is booming due to increased awareness among consumers and rising incomes, along with improved farming practices that make organic yields more robust. As a result, the increasing demand for organic food in the area under organic farming is increasing in a positive way. For instance, according to the Research Institute of Organic Agriculture (FiBL) Statistics, the total farmland under organic farming in Saudi Arabia was 24.5 thousand ha in 2017, which reached 26.6 thousand ha by 2020. The increase in organic farmland increases the usage of organic fertilizers, thereby contributing to market growth.
Along with this, in the GCC countries, Saudi Arabia is the largest market and has a functioning organic sector. Organic farming is seen as a viable development strategy for the agricultural sector. The Saudi government has started taking steps to support more eco-friendly farming systems to cope with the growing demand for healthy food products that also help safeguard scarce water and soil resources. For instance, the investment of SAR 750 million (USD 200 million) by the Saudi Arabian government as a part of its strategy for innovation in agriculture increased the number of organic farms by 28% in 2021. The government's strategies help Saudi Arabia achieve its overall goal of boosting the organic market and strengthening the sector's development.
Moreover, the GCC nations recognize the potential of organic agriculture, and they have been taking steps to support an eco-friendly farming system, boosting the demand for organic fertilizers. Additionally, the increase in health-conscious people is driving the need for increased production. The sector's development is further supported by the need for sufficient production, innovative marketing strategies, and an institutional and legal framework. Therefore, the demand for organic products is increasing due to the increased focus of governments on the organic sector, which will parallelly aid the growth of the organic fertilizer market during the forecast period.
Saudi Arabia Dominates the Market
Saudi Arabia has the most arable land among all the countries in the GCC region, though the arable land is only 1.63% of the total land area. The percentage of organic land in total arable land is growing year over year. For example, the percentage of organic agricultural land will be higher in 2020 than it was in 2019.Additionally, there are significant developments taking place in Saudi Arabia in the organic sector. On the production side, the number of producers is also increasing, which shows a positive impact on the organic fertilizer market's growth. For instance, the number of producers in 2019 was 244, which has increased to 312 in 2020. The increase in the percentage of organic farmland along with the number of producers is giving wings to the organic fertilizer market in Saudi Arabia.
Along with this, the intensity of consuming healthy and nutritious foods is increasing. This is driven by rapid urbanization and high disposable incomes. So, they are looking forward to healthier foods with fewer chemical residues. Thus, the country is expected to witness growth in the demand for organic fruits and vegetables. The production of organic fruits and vegetables is not sufficient to meet the local demand and is highly dependent on imports. Therefore, it is planning to reduce the import burden on food. Thus, the need to enhance organic productivity is pushing the demand for organic fertilizers, which helps the market grow.
Furthermore, Saudi Arabia's major urban areas are the main consumption centers for organic products. Most of the specialized organic shops and supermarkets with organic sections are located in some of the country's largest cities (Riyadh, Dammam, Al Khobar, and Jeddah). Such factors are leading to an increased need for organic production and creating demand for organic fertilizers. For this reason, the Saudi Arabian government is taking initiatives to adopt sustainable agricultural practices, thereby boosting the organic fertilizer market in the region. The increase in the adoption rate of hydroponics and the encouragement of attempts to convert desert land into arable farmland by the government are helping the market grow. Therefore, the increase in the percentage of organic agricultural land along with the organic food demand will cater to the organic fertilizer market's growth in the coming years.
