IndexBox has published a new report, titled ‘EU – Mixed Nitrogen, Phosphorus And Potassium Fertilisers – Market Analysis, Forecast, Size, Trends, and Insights.‘ Below is a summary of the report’s key findings.
In 2020, the nitrogen, phosphorus and potassium (NPK) fertiliser consumption in the European Union (EU) amounted to twelve million tons, or approximately US$4,9 billion. Nearly 50% of the market is supplied by imports, which may include the mutual trade between the EU countries. Due to the pandemic, imports of fertilisers to the EU countries fell sharply from April to May 2020, but started to recover in July, maintaining this trend until the end of the year. Fertiliser demand is expected to grow even more in 2021, should the pandemic wane gradually.
A new challenge to the fertiliser market may be introducing a carbon tax on imported products in the EU countries. As part of the Green Deal, the EU plans to introduce – according to the baseline scenario until 2025 – an additional tax on imported products.
The tax initiative is supported by European producers, who have been subject to the Emission Trading System (ETS) since 2005, paying the costs of complying with the emission requirements. The ETS system’s introduction helped reduce greenhouse gas emissions by 23% by 2018, compared with 1990. On the other hand, it weakened the competitiveness of European products, compared with countries where the regulation is less strict.
Fertiliser producers may be the first to be hit by the new regulation. Due to high energy consumption, fertiliser manufacturing processes have a heavy carbon footprint. The introduction of the tax will affect all levels of the product value chain. Modern plants for the production of ammonia fertilisers, in terms of energy consumption, are close to the theoretical minimum, making further improvements difficult and costly. Both local and foreign producers will be forced to enter serious price competition in the European sales market’s struggle.
Fastest-growing importer in the EU
In 2019, Spain (825 000 tons), Poland (660 000 tons), Lithuania (583 000 tons), Germany (399 000 tons), Romania (374 000 tons), France (347 000 tons), Ireland (338 000 tons), Belgium (291 000 tons), Hungary (282 000 tons), Sweden (276 000 tons), Denmark (253 000 tons) and Latvia (219 000 tons) represented the major importer of mixed NPK fertilisers in the EU. These countries represent 77% of total import. Estonia (201 000 tons) followed a long way behind the leaders.
From 2012 to 2019, the most notable growth rate in terms of purchases, among the leading importing countries, was attained by Romania, while imports for the other leaders experienced more modest paces of growth.
In value terms, the largest mixed NPK fertilisers import markets in the EU were Spain (US$270 million), Poland (US$218 million), and Lithuania (US$191 million), together comprising 31% of total imports. Germany, France, Romania, Belgium, Ireland, Hungary, Sweden, Denmark, Latvia and Estonia somewhat lagged behind, accounting for a further 46%.
The import price for mixed NPK fertilisers in the EU stood at US$351/ton in 2019, falling by -1,6% against the previous year.
Average prices varied somewhat among the major importing countries. In 2019, major importing countries recorded the following prices: France – US$398/ton, Germany – US$381/ton, Sweden –US$293/ton and Estonia – US$297/ton. Sweden and Estonia were among the lowest.
From 2012 to 2019, the most notable growth rate in terms of prices was attained by France, while the other leaders experienced a decline in the import price figures. –IndexBox AI Platform