June 19, 2024

The Global Ammonia Market is Estimated to Witness High Growth Owing to Increasing Demand from Agriculture Industry

The global ammonia market features derivatives such as urea, ammonium nitrate, and ammonium sulfate that are used as fertilizers. Ammonia acts as a building block in the production of numerous nitrogen-containing compounds utilized across industries such as pharmaceuticals, textiles, and refrigerants. It has applications in agriculture as a nitrogen fertilizer to enrich soil for improved crop yield. The increasing global population has augmented the demand for food crops, propelling fertilizer consumption and boosting the ammonia market.

The global ammonia market is estimated to be valued at US$ 82.74 Billion in 2023 and is expected to exhibit a CAGR of 6.5% over the forecast period 2024-2031.

Key Takeaways

Key players: Key players operating in the ammonia market are Yara International ASA, BASF SE, CF Industries Holdings, Inc., Nutrien Ltd., Potash Corporation of Saskatchewan Inc., Dangyang Huaqiang Chemical Co., Ltd., Shanxi Jinfeng Coal Chemical Co Ltd., GTS Chemical Holdings plc.,Togliattiazot, OCI Nitrogen B.V., Agrium Inc., Sabic, and Koch Fertilizer, LLC among others.

Key opportunities: Growing emphasis on sustainable agriculture practices and the adoption of new technologies such as nanotechnology and biotechnology for developing eco-friendly fertilizers present significant opportunities in the global ammonia market. Additionally, the increasing exploration of ammonia as a carbon-free fuel also opens new avenues.

Global expansion: Key manufacturers are investing in capacity expansion projects across regions to cater to the rising demand. For instance, Yara International planned to increase its annual ammonia production capacity in Indonesia to 1.5 million tons by 2023. Similarly, CF Industries is expanding its nitrogen production facilities in the United States.

Market drivers: The primary driver for the ammonia market is the increasing global food demand fuelled by the rising population. Ammonia-based fertilizers play a key role in boosting crop yields to feed more people. Other major factors such as industrialization and improving standards of living are also propelling the market growth. Stringent environmental norms regarding emissions may marginally challenge the market expansion.

PEST Analysis

  • Political: Government policies and regulations regarding environment protection and use of ammonia in industries.
  • Economic: Affordability of ammonia to key end-use industries like agricultural, industrial and mining sectors due to changes in economic conditions.
  • Social: Acceptance and awareness among farmers regarding use of ammonia as fertilizer for higher yield.
  • Technological: Development and adoption of innovative production technologies to lower costs and enhance efficiencies.

Geographical Regions of Concentrated Value

The ammonia market in terms of value is primarily concentrated in Asia Pacific region due to large scale consumption in agriculture sector of countries like China, India. Asia Pacific accounts for over 50% of global ammonia demand led by well established fertilizer industry and huge cultivable land. North America and Europe are other major geographical regions where demand remains robust backed by chemical industry usage of ammonia.

Fastest Growing Region

The Middle East and Africa region is expected to be the fastest growing market for ammonia during the forecast period. This is attributed to factors such as increased investment toward expanding domestic fertilizer production capacity, growing population and arable land in countries like Saudi Arabia, UAE, South Africa. Initiative undertaken by governments in the region to strengthen agricultural sector and ensure food security would further drive the ammonia consumption in fertilizer applications over coming years.