Market dynamics, application of new slow and controlled-release fertilizers in China

Controlled-release fertilizers fall into the categories of resin-coated azophoska, resin-coated urea, sulfur-coated urea and coated microelements. The demand for sulfur-coated urea was 1.4 million tons in 2015, and this figure is projected to reach 2.5 million tons by 2024.

 

Controlled-release fertilizers are applied mainly to grain crops, which represent a significant part of the traditional foods of emerging Asia-Pacific economies. Other factor, such as a growing population, policy support and increased yields through the use of fertilizers will increase demand for controlled-release fertilizers.

 

 

According to recent data, China’s new fertilizer industry has been growing rapidly over the past decade. According to incomplete statistics, there are currently over 2,000 companies that produce new fertilizers in China, representing 30% of total fertilizer production and valued at more than RMB50 billion, delivering an annual output value in excess of RMB16 billion. New fertilizers are emerging as the foundation of China's fertilizer market.

 

By category, new fertilizers in China fall primarily into five classes, which are functional fertilizers, slow and controlled-release fertilizers, commercial organic fertilizers, microbial fertilizers and water-soluble fertilizers. In 2017, the total output of new fertilizers in China was 37 to 41 metric tons, applied to an area of around 1 billion mu. Specifically, the output of slow and controlled-release fertilizers stood at 1 to 12 million tons per year, with most being compound fertilizers combined with slow and controlled-release fertilizers. The output of pure slow and controlled-release fertilizers was about 3 to 3.6 million tons per year, accounting for 27% of total output. 

Being environmentally-friendly, efficient, time-saving and labor-saving, slow and controlled-release fertilizers have developed rapidly over a decade and have become major products of China's fertilizer industry. In the future, they will enable China to freeze fertilizer growth and help ensure national food security and agricultural sustainability.

 

According to the latest statistics from the Office of China National Committee Aging, there are currently 240 million people aged above 60 in China, accounting for 17.3% of the total population, meaning that on average, close to four workers are supporting one elderly person. This also indicates the China’s population is becoming increasingly old. By 2020, the number of people aged over 60 is expected to be roughly 255 million. An ageing population also affects the labor force more in rural areas. 

 

Slow-acting fertilizers, when applied to the rhizosphere, can deliver better utilization ratios. At present, conventional fertilizers still rely on extensive surface broadcasting, posing heavy burdens on an ageing labor force, especially when applied in mountainous areas. New fertilizers have drastically reduced labor costs without compromising yields, providing farmers with increased incomes. Therefore, China’s new fertilizer market has considerable potential.

 

According to a conservative estimate, the CAGR of slow and controlled-release fertilizers will stand at 10% to 15% over the next decade. By 2025, China will also produce 7.55 to 11.26 million tons of slow and controlled-release fertilizers, delivering an output value of between RMB21.1 million and RMB31.5 billion.

 

The fertilizer industry urgently needs to upgrade many products, as traditional nitrogen fertilizers and phosphate fertilizers face serious overcapacity and underperform. Slow and controlled-release fertilizers, by virtue of their technical soundness and potential, represent a significant new approach compared to traditional fertilizers, such as nitrogen fertilizers and phosphate fertilizers. Today, many companies that produce nitrogen fertilizers have established their own production lines for slow and controlled-release fertilizers. In recent years, slow and controlled-release fertilizer producers, represented by Kingenta, have been proactive in promoting production cooperation with upstream nitrogen fertilizer and phosphate fertilizer producers, by sharing technologies, brands, channels and services, which has advanced the development of the slow and controlled-release fertilizer industry. We are confident that China's slow and controlled-release fertilizer market is maturing and will become a major market for both domestic and overseas products.

(Source: Ng Chang Chai's speech at BioEx 2019)


Ng Chang Chai
Secretary-General of LISA Consortium, Malaysia