Market Trends of Southeast Asia Fertilizer Industry
This section covers the major market trends shaping the Southeast Asia Fertilizer Market according to our research experts:
Need for Improving Productivity Amid Growing Demand for Food Crops
Population in the region is increasing at a rapid rate. The growing population is adding to the food demand. Supplying food to this growing population is important to increase production. On the other hand, the increasing urbanization and industrialization may lead to a decrease in the arable land in coming years. Fertilizers have been used for a long time to increase the productivity of crops.
Adequate and balanced use of fertilizer is likely to help in feeding the increasing population from the available cultivable land. In order to increase the production of corn due to the increasing demand from the poultry sector, the Indonesian government has also implemented policies promoting domestic corn production and other crops. According to the Food and Agriculture Association, the fruits yield in Southeast Asia decreased to 118,890 hg/ha in 2019, from 127,138 hg/ha in 2016. It is an indication of the need to increase the productivity of agricultural land by application of fertilizers as increasing health consciousness and demand for fruits is increasing in the region. This is expected to drive market growth over the forecast period.
Technical and scientific advances have made the application of fertilizers more efficient in recent years and helped farmers maximize fertilizers benefits, while reducing risks of their over/under/misuse. An increasing number of innovative fertilizer products contain secondary macronutrients (S, Ca, and Mg) and micronutrients (e.g., Zn and B) to address the increasing occurrence of deficiencies. Therefore, fertilizers are viewed as the future of crops to increase the production and fill the gap, as they can solve problems, like salinity of the soil and chemical-run offs from fields, among others. Therefore, they ensure the soil is more fertile with time.
Grains and Cereals Segment Dominates the Market
Rice is the major staple food of the region. Modern mechanized farming methods and new strains of rice are gaining popularity in the region. Some of the research institutions, such as the International Rice Research Institute (IRRI), are actively involving in research for promoting rice cultivation in the region. It has introduced several rice varieties in Vietnam and is also involved in the irrigated rice ecosystem. More than 1,600 varieties of rice are grown in Mekong Delta. More amount of nitrogen fertilizers are applied to the rice crop as the soil in the region are depleted of nutrient due to intensive cultivation of rice. Thus, the growing research and launch of new varieties are encouraging rice cultivation and leading to increased use of fertilizers, which, in turn, is driving the growth of the market in the region.
As per FAO data during the study period, the grains and cereals industry of the Philippines produced 27.2 million metric tons of grains and cereals in 2017. Rice, maize, and sorghum are the major crops grown in the Philippines. Out of all the crops, maize and rice are the two dominating crops, which utilize a major share of fertilizers in the country. According to the FAO's analysis, the maize crop grown in the Philippines utilizes 17.7% of the total Philippine fertilizers. The countries are focusing on achieving self-sufficiency in grains production and require the use of an appropriate number of fertilizers, which drives the growth of the market in the region.
