Chemical fertilizer produced in three general categories: nitrate, phosphate, and potash. In 1860, Germany as the first chemical fertilizer producer on an industrial scale started the operating by building a unit where produced phosphate chemical fertilizer from urea phosphate and its production’s reached to 175 million tonnes.
China is known as the largest producer and one of the biggest chemical fertilizer consumers in the whole world that its production’s amount had been about 54 million tonnes and its average price range of urea is estimated about 2.5 thousand Yuan per tonne in this country.
Greatly increase in population turned food security into one of the most important issues in the world and it makes the expansion of the agriculture industry. One of the effective practical ways to increase production rate of farming is using animals and plants fertilizer but in the beginning of the 19th century when agriculture industry has grown significantly, the world faced restriction of animals and plants fertilizer which it brought chemical fertilizer to the light in the world.
In general, fertilizers are divided into three categories: nitrate, phosphate, and potash. The main material which used in nitrate fertilizer is nitrogen and the most essential ones are: sodium nitrate, calcium nitrate and potassium nitrate. Phosphate fertilizers contain: phosphate soluble in water and the most important ones among them are: single super phosphate, double super phosphate, and triple super phosphate. You can name potassium sulfate and fused potassium as the most major potash fertilizer in the global market.
Germany, the first chemical fertilizer producer
The first attempts to produce chemical fertilizer in an industrial scale were made by Germany which was started by potassium extraction from this country’s mines in 1860 and meanwhile the first production unit of chemical phosphate fertilizer from urea phosphate in an industrial scale was built in Germany and in 2021, the production of chemical fertilizer has reached 175 million tonnes in this year. China, Russia, and Canada are among the prominent chemical fertilizer producer countries in the world.
China’s got over 18% of the world’s production and with because of having 31% share of chemical fertilizer production, is considered as the biggest chemical fertilizer producer in the world, also with consuming over than one-third of world chemical fertilizer, put itself in the first rank of world consumer’s list. Therefor in this report, you can read an analysis of the amount of annual production of chemical fertilizers in China during the years 2010 to August 2022 which is being published monthly by China’s National Statistic Centre and presented in figure 1; in addition, figure 2 shows the analysis of this product’s price in recent 3 months in 2020.
Environmental aspects, barriers to fertilizer production
According to figure 1, the amount of chemical fertilizer production in China, because of 1% drop annually the production process divided into two 5-year intervals and it’s reached from 63 million tonnes in 2010 to about 54 million tonnes in 2021. As you can see in this figure, at the first 5-year interval (from 2010-2015) due to discovery of new sources and increasing of chemical fertilizers especially diammonium phosphate and mono ammonium phosphate, the production of chemical fertilizer accompanied by approximate upward trend and has got 10 million tonnes production growth. But in the second interval from 2015, the chemical fertilizer production has got downtrend in the way that it’s accompanied by 20 million tonnes during this time.
The most essential reason for the 20 million tonnes reduction of chemical fertilizer in China since 2015 to 2021 was the closure of some factories to optimize the fertilizer production capacity in China. As this plan, fertilizer production in central cities and near to residential areas was stopped due to uneconomical low-capacity factories and environmental aspects.
It’s to be mentioned that because of China’s main aim which is the stability of domestic fertilizer prices and support for farmers, therefor it’s been predicted that this country follows policies to not cause significant drop in chemical fertilizer production capacity in this country, that’s why lack of access and unbalanced supply with demand will have a negative impact on price stability.
It’s worth mentioning, according to the latest annual data provided by the National Administration of China which is related to 2018, Hubei, China, with has about 12% of the total chemical fertilizer production in China, has been the largest fertilizer producer in this country; it’s also important to say that the latest giving information since 2022 in China’s National Statistics Centre was at the end of August which it’s brought in figure 1.
Fertilizer price fluctuation in the last quarter
As it’s said, according to available information, fertilizer price has been investigated and has been brought in figure 2. It should be noted that the fertilizer investigation in this figure, is especially related to urea. As it’s shown, urea price in China faced depreciation from the middle of July to the beginning of August, so in this period has reached from 2.6 Yuan per tonne to about 2.3 Yuan per tonne which it’s the most important reason was because of the presence of Covid 19 new cases and consequently, the quarantine has affected on many consumption markets and there was no expectation for chemical fertilizer market and due to the drop in demand, this market faced fall but with the increase in demand again and in the middle of September, the fertilizer price started to grow, till the latest of September which the price has gone through a stable trend.
