Specialty Microgranule Market boomed in Argentina in 2022, followed by 2024 slump

In 2022, Argentina solidified its position as a regional leader in the microgranule market, accounting for 90% of the over 60,000 tons sold across Latin America. However, the outlook shifted in 2024 as the total volume of microgranules traded in Latin America dropped to between 38,000 and 40,000 tons.

According to the 2024 DunhamTrimmer Global Value-Added Fertilizer (VAF) Market Report, several factors contributed to this downturn, including falling phosphorus prices, shrinking agricultural margins, excess inventory in distribution channels, and Argentina’s economic instability. Further, the average price per ton declined, impacting company margins and slowing down investments.

Microgranule fertilizers are defined by their specific granulometry and high nutrient concentration. Experts highlight their critical role in the early stages of field crop development, such as corn, wheat, and soybeans, while noting their growing adoption in other intensive crops, as well.

Value-Added Fertilizers can be considered hybrids that combine conventional fertilizers with biostimulants. VAFs consist of three main elements: Fundamental Components, Functional/Physiological Components, and Enhancement Components.

They are designed to enhance nutrient uptake, improve plant resilience, and optimize potential productivity potential—all while minimizing their environmental impact. VAFs address the core needs of improving sustainability, cost-effectiveness, and efficiency in agricultural production systems.

Global Context

The global value-added fertilizer market has seen significant growth, surpassing $19 billion in 2022 and projected to reach $30.59 billion by 2030. According to the DunhamTrimmer report, this expansion has been driven by the demand for technologies that sustainably enhance agricultural productivity.

Within this context, Latin America has emerged as a high-growth region, reaching sales of $3.2 billion in 2022 and projected to hit $6 billion by 2030. In this segment, microgranule fertilizers have gained prominence as a promising solution due to their precision and efficiency in crop nutrition, with Argentina playing a starring role in this trend.

Despite the drop in the microgranule market last year, Valentín Bastini, Global Manager of Crop Nutrition and Biostimulation at Rizobacter, emphasized the potential of these technologies, which at one point accounted for over 6% of the area fertilized with phosphorus in extensive crops. He noted the presence of 14 companies active in the Latin American market, underscoring the interest and competition in this sector.

Rizobacter, a pioneer in the region with Latin America’s first microgranule plant, maintains a significant leadership position in Argentina, holding a 64% market share in 2024 with 22,850 tons sold. The company is committed to sustainability, while incorporating biological components into its product portfolio.

Meanwhile, Fernando Manfredi, Director of Amauta Agro, another key player in the sector, highlighted the exponential growth experienced until 2022-2023, but also pointed to the sharp decline in the Argentine market over the past year and a half, estimated at 30%. Manfredi stressed that Argentina’s economic context has not been conducive to the development of this type of technology, which thrives in scenarios with favorable grain prices and stable policies.

An Opportunity

Despite the current challenges, the future outlook for the microgranule market in Argentina and Latin America remains encouraging. Ignacio Moyano Córdoba, Vice President of Business Development for Latin America at DunhamTrimmer, believes that economic stabilization and improvements in the supply chain will allow the market to regain its growth trajectory. The available technology offers solutions to boost agricultural productivity efficiently and sustainably.

Bastini also sees positive signs, such as the significant reduction of excess specialty fertilizer inventories during the last harvest season, which could spur new demand. However, the recovery of producers’ investment in technology will depend upon improved margins.

In the long term, economic predictability, policies that promote productivity, and appropriate land legislation could establish microgranule fertilizers as one of the key drivers of sustainable agriculture in the region.

The effectiveness of these products in delivering essential macro- and micronutrients at planting time, coupled with the rising demand for precision agriculture, bodes well for the sector, particularly in emerging markets, such as Uruguay, Paraguay, Mexico, Colombia, and Bolivia. However, the key will lie in the ability of companies to innovate and adapt to changing market conditions.

(Editing by Leonardo Gottems, reporter for AgroPages)