Global Demand for Indian Fertilizer

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Global demand for Indian fertilizer has been on steady rise and so has been its demand for fertilizer imports. India at present holds the fourth position as an exporter of fertilizer in the global market.

But its own demand for fertilizer almost equals its exporting capacity. The rapid rate of population growth and the rising demand for food products has increased the demand of fertilizer in India.

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Global demand for Indian fertilizer has been on steady rise and so has been its demand for fertilizer imports. India at present holds the fourth position as an exporter of fertilizer in the global market.

But its own demand for fertilizer almost equals its exporting capacity. The rapid rate of population growth and the rising demand for food products has increased the demand of fertilizer in India.

The primary factor behind the demand of fertilizer in India is the nature of Indian soil. Although the soil for agriculture is rich in silt, it is deficient in nutrients such as potassium, phosphate and nitrogen. To supplement these nutrients, India has to produce and also import fertilizers.

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Amongst the major fertilizers exported from India is urea. The following table shows the major importers of fertilizers from India (all figures are in 000 tons):

Product	Country	1996-1997	1997-1998	1998-1999	1999-2000	2000-2001	2001-2002	2002-2003	2003-2004	2004-2005	2005-2006	2006-2007
Urea	Nepal	10.00	14.69	–	–	56.83	15.72	18.75	63.37	4.66	–	14.77
AS	Bangladesh	–	–	–	–	–	–	–	–	6.76	–	–
NPK	UAE	0.60	–	–	0.04	0.04	–	–	0.06	0.06	0.06	0.06
MOP	Bangladesh	–	–	–	–	12.84	–	–	4.67	5.90	–	–

Apart from the inorganic fertilizers, the demand for organic fertilizers produced in India has increased in recent years. One of the major players in the field of organic manures and bio-products is M.J. Exports. U.K is a major importer of organic fertilizer from India. Many countries prefer organic fertilizers because of the lower risks of environmental hazards.

The private fertilizer companies in India are now taking their business to foreign shores, setting up plants in other countries. This is a positive gesture towards increasing the global demand for Indian fertilizer and also meeting the same. Soon after Reliance Industries’ declaration of building two two-million ton capacity fertilizer units, National Fertilizer Limited has announced its negotiations and talks with International Chemical Group to start joint ventures in Brunei, Qatar and Egypt. Kribhco is planning to set up plants in collaboration with a Tunisian fertilizer company named GCT. The venture will see increased production of phosphoric acid and Muriate of Potash (MOP). The future, thus, looks bright for the Indian fertilizer industry in the global market. The Government of India is lending all support to the fertilizer companies by subsidizing the raw materials, relaxing the export policies and so on.

The global fertilizer demand as a whole shows a sharp rise in recent years. 2005-2006 registered a 1.5% growth which increased sharply to 5% in 2006-2007. The demand for nitrogen fertilizers is the highest, surpassing the demand for potassium and phosphate fertilizers. If the demand is analyzed on the basis of regions, then North America shows the greatest demand for fertilizer with an annual demand growth of 9.9%, followed by West Asia (8.1%) and South Asia (5.5%).