According to the United Nations (UN), the world population is set to steadily rise over the years, from 7.7 billion to 9.7 billion in 2050. With the world’s population expected to reach its peak around the end of the current century, at a level of nearly 11 billion, the global food crisis is growing. The agricultural production growth is facing an upward demand to cater to the overall food production. It is estimated that food production in 2007 has to be increased by 70% to meet the food demand of 2050 – signifying the need for resource management.
In order to ensure access to safe, nutritious and sufficient food, global production of food will have to increase and farmers will have to boost crop production efficiency and production while doing so in more energy and environmentally efficient way. Furthermore, the COVID-19 pandemic has impacted food supply chains, especially in the informal and unorganised sector in rural areas. The lockdown has impacted food accessibility, agriculture input supplies, jobs and farmer income. Agricultural inputs such as seeds, fertilisers and farming equipment are vital to ensure sufficient food stockpiles. Fertiliser is one of the agriculture inputs to boost food production and meet the world’s food challenges head-on.
It is a chemical or natural substance added to soil or land to supply essential nutrients and support the growing crops. There are two major types of fertilisers available in the market, which are organic and chemical (inorganic) fertilisers:
- Organic fertilisers contain only plant- or animal-based materials form naturally occurring processes, such as manure, compost etc.
- Inorganic fertiliser is manufactured artificially and contains minerals or synthetic chemicals.
Significant growth in the agriculture sector and increasing requirements for enhancing soil fertility and crop growth are the key factors driving the market’s growth. In line with this, the widespread adoption of organic farming practises as a means of sustainable development to bridge the substantial demand and supply gap of food products also boosts the market growth. However, slow-release capability and unequal distribution of nutrients in organic fertilisers may slightly hinder their growth in the near-term. Nevertheless, the sustainable, biodegradable, renewable, and environmental-friendly nature of these fertilisers will positively propel the future fertiliser market growth.
On the other hand, arable land is declining, due to industrialisation and urbanisation. Fertilisers have been used for a long time to increase the productivity of crops. This adequate and balanced use of fertiliser may help in feeding the growing population from the available cultivable land. Hence, the significant factors driving the demand for fertilisers include the need for crop intensification while pursuing increasingly sustainable practices, and seeking natural alternatives to boost production with decreased pressure on the environment to close the yield gap.
Climate change, including water scarcity, land and soil degradation, unstable temperature and higher seawater levels, increasingly results in crop damage, moisture stress and resource constraints that jeopardise agricultural productivity levels. It is shifting current ideal growing conditions and leaving farmers behind. Hence, the use of fertiliser in agriculture is essential to keep the lands productive.
Additionally, the development of advanced farming techniques and increasing utilisation of bio-fertilisers are other major growth-inducing factors. Apart from this, expanding trade activities of crops and produce, especially with developing nations, also positively impact the market.
Other factors, including the implementation of favourable government policies promoting nano-fertilisers’ usage for the maintenance of flat green grounds and fields, coupled with increasing environmental consciousness across the globe, are anticipated to drive the market further.
Agriculture has played a crucial role in modern Malaysia’s development, resulting in becoming the world’s leading palm oil producer. Today, close to 6 million hectares of land is under oil palm cultivation, contributing 2.7% to the Malaysian Gross Domestic Product (GDP) in 2019. There is no doubt that oil palm consumes the highest amount of fertiliser with more than 80% of Malaysia’s fertiliser consumption. The oil palm tree has a high requirement for potassium and phosphorus fixation by the country’s mainly acidic soils.
In 2015, paddy was the second-largest fertiliser consumer among this group of crops after oil palm, but with only 8.4% of national fertiliser consumption or 10% of oil palm consumption. It followed by other crops (5.1%), fruits (2.1%) and vegetables (1.5%).
Malaysia had been a net importing country of fertilisers, the country imported the most K fertilisers and exported the most N fertilisers over the past years. The import value of fertiliser has been reducing in the period of 2011 to 2016. In 2011, it reached RM 5.38 billion and then declined steadily to RM 3.98 billion by 2016 due to the downward trend in unit price. The import and export average unit price of fertilisers in Malaysia had dropped from 2010 to 2016, following the same CPO price trend.
Among the different types of fertilisers, bulk blend or mixture fertiliser is becoming increasingly popular within the agriculture and plantation industry. Various straight fertilisers and essential nutrients are mixed by the producer based on the customer’s demand. It is manufactured by mixing individual granular fertilisers in the proper ratio whereby the fertiliser’s nutrients can maintain their original characteristics. It is customised to match the crop needs and cheaper than compound fertiliser, which requires a specific chemical reaction to combine the nutrients. The mixture fertiliser contains complete and balanced nutrients for crops, whereas straight fertiliser includes only one nutrient element, such as nitrogen (N), phosphorus (P) and potassium (K). Hence, the mixture fertiliser is in demand due to matching crop nutrient requirement and more economically sound.
Since the COVID-19 outbreak, the fertiliser industry has been significantly affected in many parts of the world from the outset of pandemic. Due to the shortage of labour and the shutdown of a few fertiliser plants located in the integrated chemical complexes, shipments were affected in the initial lockdown process. However, the industry is expected to recover and grow due to the companies rearranging their operations, which had earlier led to restrictive containment measures and closure of commercial activities that resulted in operational challenges. Nevertheless, it has been business as usual for all the producers, cooperatives, wholesalers and farmers to ensure the continuous supply of food to feed the world.
