Although biofertilizers were first commercialized in North America and Europe, there is increasing preference towards their use in parts of Asia Pacific and South America. North America was the largest market for biofertilizers, followed by Europe. Together these markets accounted for over 50% of the global revenue. Growing preference towards organic food coupled with growing awareness regarding the hazards associated with chemical fertilizers and atmospheric pollution has resulted in high consumption in the region. In addition, strict regulatory scenario has forced many farmers to adopt biofertilizers in place of their chemical counterparts and this is expected to boost the demand for biofertilizers over the next decade. The “Common Agricultural Practice” limits and restricts the use of synthetic fertilizers while promoting the use of biofertilizers and organic farming.
Asia Pacific was the third largest market for biofertilizers, with increased demand from regional markets such as India, China and Taiwan. Asia Pacific is expected to witness double-digit growth over the period 2013 to 2020 due to the increased consumer preference towards organic food and growing agricultural activities. However, contrary to other regions, the key application of biofertilizers in Asia Pacific is soil treatment but not seed treatment.
South America is expected to show fastest growth over the next seven years on account of the growing agricultural activities in Brazil. The region is expected to grow at a CAGR of 16.4% from 2013 to 2020. Nitrogen fixing biofertilizers were the largest product segment in 2012 and accounted for over 70% of global revenue. Growing demand for nitrogen fertilizers is perceived to be a key factor for nitrogen fixing biofertilizers market development.
Nitrogen fixing biofertilizers are excessively consumed in the regions of South Asia and South America due to increased agricultural activities.
Phosphate is the second most widely used nutrient in fertilizers and witnessed consumption of over 40 million tons in 2012. However, the phosphate provided to plants in the form of chemical phosphate fertilizers is immobilized rapidly and becomes unable to plant.
Seed treatment was the largest application of biofertilizers and accounted for over 70% of the market in 2012. Treating seeds with biofertilizers helps them sustain bacteria and virus attacks and also helps increasing the yield. In addition, biofertilizers help in harnessing atmospheric nitrogen and making it available to the plant. Seed treated with biofertilizers are capable of increasing phosphorous content of soil by solubilizing it and improving availability.
Soil treatment is the other primary application of biofertilizers and it involves the spraying of biofertilizers over the agricultural land. It increases the fertility of the soil and improves the yields of the planted crop.
The biofertilizers market has been segmented based on product, applications, and regions. In terms of product, over the period of seven years between 2015 and 2022, the market has been divided into three major segments:
Figure 2. Biofertilizers market segmentation
Nitrogen fixing biofertilizers are made up of mixed strains of various nitrogen fixing bacteria such as Rhizobium, Azospirillum, Acetobacter and Azotobacter, and help improve nitrogen yield of the soil. Phosphate solubilizers are employed as control agents for agricultural improvement.
In terms of application, the market is divided into two major segments including seed treatment and soil treatment.
Product and application has been segmented on a regional level in terms of revenue (USD million), where 2014 has been considered as the base year with a forecast period of seven years between 2015 and 2022.
The biofertilizers market is projected to grow at a CAGR of 14.08% from 2016, to reach USD 2,305.5 million by 2022 (Figure 3). The market is driven by factors such as: i) increase in demand for fertilizers due to the rise in global food production and ii) development of new biofertilizer manufacturing technologies. The high growth potential in emerging markets and untapped regions provide new growth opportunities for the players in the biofertilizers market. On the other hand, some factors restraining the biofertilizers market are lack of awareness and low adoption of biofertilizers coupled with poor infrastructure.
Global biofertilizers market is expected to witness substantial growth over the period 2015 – 2020 on account of providing physical barrier against pests. In addition, these products protect plants against pathogens and enhance absorption of zinc and phosphorous. In addition, use of biofertilizers in agriculture aids the decomposition of organic residues and stimulates overall plant development and growth. Growing need for high agricultural yield in order to meet increasing population demands has triggered the use of biofertilizers because of low environmental impact. Increasing need for organic foods among consumers in expected to have a positive impact on the biofertilizers market over the next five to seven years. Moreover, rising of chemical fertilizer prices coupled with commercial response to growing food cost is expected to be one of the key drivers for biofertilizers market over the period 2015 - 2020.
Figure 3. Global biofertilizers market revenue, 2012 – 2022 (USD Million)
Key issue in bioertilizers market growth and acceptance is the industry value chain. It consists of raw material producers & suppliers, biofertilizers producers, distribution channels, and end-users (farmers, domestic cultivators). Biofertilizers are produced through various sources such as ley crops, frying oils, potato peels, manures, slaughterhouse wastes, organic domestic wastes, and food industry residues. There is also considerable presence of feedstock suppliers, who outfit the biofertilizers producers. For example, Swedish Biogas is an integrated company that manufactures biofertilizers as a byproduct of biogas production. The company also supplies raw materials to independent biofertilizers producers. Most of the raw material suppliers incur costs in terms of logistics, i.e. raw material procurement and delivery to manufacturers. With most of the raw materials being bio-waste, profitability of suppliers is high which is estimated at approximately 10% of value addition.
Majority manufacturers of biofertilizers are integrated across different stages of the value chain as the demand of the product is largely dependent on growth of the end-use industries. 90% of total biofertilizers manufactured is used in the production of corn, rice, and maize.
Organic food and beverages are naturally derived products, without comprising synthetic chemicals, and food additives. Key product forms of organic foods include organic fruits, vegetables, meat products, naturally derived alcoholic beverages such as wine and beer. Increasing consumer awareness regarding the adverse impact of inorganic food on human health has resulted in industry trend shift towards promoting organic food market and is expected to remain one of the key factors for biofertilizers market over the forecast period.
Nitrogen fixing biofertilizers dominated the market, accounting abput 79% of global revenue in 2012 (Figure 4). Nitrogen-fixing biofertilizers are used for leguminous as well as for non-leguminous crops, especially, when growing rice and sugarcane. The nitrogen-fixing segment growth is attributed to the fact that nitrogen-fixing biofertilizers are the most commonly used biofertilizers, across the globe. Substantial R&D efforts have been carried out in the last couple of decades, along with increasing awareness of the farmers; these are the major reasons driving the growth of this market. Rising importance of nitrogen fixation to increase intake of numerous compounds such as nucleic acids and chlorophylls in plants is expected to have a positive impact on market over the forecast period. However, market presence of synthetic fertilizers is expected to pose a credible threat to nitrogen fixing biofertilizers demand over the next seven years.
Figure 4. Global biofertilizers market revenue share by product
Phosphate solubilizing bacteria accounted for 14% of global biofertilizers market in 2012 and is expected to account for about 18 % of revenue share by
One of the upcoming trends expected to stimulate the growth prospects of this market is the introduction of liquid biofertilizers. Last are liquid formulations containing the desired microorganisms, micronutrients, and chemicals promoting the formation of resting spores. This helps the biofertilizer to attain a longer shelf life and tolerance to adverse conditions
The global liquid fertilizer market is expected to grow at a CAGR of around 3% by 2020. The depletion of soil quality has pushed the use of fertilizers that helps farmers to increase the crop yield by three to four times. The surge in crop acreage and the growing requirement to boost crop production are stimulating many farmers to use liquid fertilizers as plants can immediately absorb these substances thus offering faster outcomes. Small-scale farmers are also purchasing liquid fertilizers to reduce their dependency on weather conditions and get an increased yield even in damp, wet, or windy weather. Additionally, there is also a rise in the demand for the proper use of fertilizers as the degradation of soil quality is leading to micronutrient deficiency in crops worldwide.
APAC (Asia Pacific) will be the fastest-growing region in the market during the period 2012 – 2020 due to the increase in hydroponic system field areas, availability of fertilizers at subsidized rates, and rise in mechanization, which has resulted in the increased adoption of technologies such as liquid fertilizer sprayers. Some of the major fertilizer-consuming countries in the region include Australia, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Japan, South Korea, China, India, Pakistan, and Bangladesh. The demand for fertilizers will see tremendous growth in the region owing to the surge in programs that promote balanced fertilizer use.
Seed treatment was the largest application segment, accounting for 72% of global biofertilizers market revenue in 2014 (Figure 5). Plant seeds are treated with biofertilizers in order to prevent bacteria and virus attacks that reduce crop yield. In addition, biofertilizers help in binding atmospheric nitrogen and making it available to the plant. Seeds treated with biofertilizers are capable of increasing phosphorous content of soil by solubilizing it and improving their availability.
Figure 5. Global biofertilizers market revenue share by application
Furthermore, the growing demand for fertilizers to improve the production yield is boosting the sales of new fertilizer spreader across the globe. Vendors have come up with new models of spreaders with improved features such as extended spreading widths, intelligent speed monitoring systems to enhance spreading accuracy, and slow releasing fertilizer spreaders, which help in accurate fertilizer application and maintaining the quality of the soil. Other inventions in the spreaders include LED rear lighting systems, increased hopper capacities, and section shut-off systems. Such technological advancements and improved features will accelerate the volume sales of fertilizer spreaders during the forecast period. Technavio’s market research analyst predicts the global fertilizer spreader market to grow at a CAGR of more than 6% by 2020.
Precision fertilizer spreaders will help to improve crop yields and ramp up production through calibration systems to regulate the quantity of fertilizer and mass flow controllers to monitor the amount of fertilizer required per subplot. Also, these spreaders will help in soil mapping, soil nutrient software packages to determine fertilizer application, and use satellite technology to guide fertilizer application. KUHN, AMAZONE, BBI, and Sulky are some of the popular brands for precision fertilizer spreaders in the market.
Figure 6. Segmentation by product type and analysis of the fertilizer spreader market
The broadcast spreader segment dominated the market in 2015 and accounted for around 64% of the total market share (Figure 6). These spreaders are also known as rotary spreaders or centrifugal spreaders and are mainly used for spreading granular fertilizers. Consolidation of farmland will positively influence the growth of this segment in the coming years, as these spreaders are primarily suitable for use in large farms. Moreover, the vendors are introducing new broadcast spreaders with improved features such as balanced fertilizer distribution, GPS speed sensors to maintain the right speed, and pressure-based nozzle control systems to ensure a consistent pattern in the spreading of fertilizer.
Geographical segmentation of the fertilizer spreader market is between countries from Americas, APAC and EMEA. APAC will continue its dominance in the market during the forecast period and is expected to occupy more than 60% of the overall market share by 2020. Rising dependence on fertilizers for improved crop productivity is a major factor contributing to the region's high market share. The increasing focus on the quality of crop production has prompted farmers to use phosphorous and potassium fertilizers, thereby boosting the sales of fertilizer spreaders in the region.
North America was the largest market, accounting about 32% of global biofertilizers revenue in 2014 (Figure 7). Positive agriculture industry outlook in the U.S. and Canada along with increasing awareness towards the application of eco-friendly products in farming is expected to have a favorable impact for biofertilizers market over the next seven years. Europe held 23% of global biofertilizers market revenue in 2014. The European Commission framed the „Horizon 2020 Strategy‟ in 2007, which aims at promoting consumption and production of eco-friendly products at domestic level. In addition, the commission also planned Action Plan 2020 for enhancing production of organic foods at domestic level.
Figure 7. Global biofertilizers market revenue share by region
Prevalence of favorable government support for use of eco-friendly products and increasing production output of organic foods is expected to augment biofertilizers market growth over the forecast period. MEA and Asia Pacific are expected to remain promising markets over the next seven years. Lucrative opportunities in food & beverage market in Asia Pacific and MEA is expected to play a crucial role in enhancing agriculture output at domestic level and thus expected to increase application scope of biofertilizers over the next seven years.
Major companies in the sector include:
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