Soil contamination and environmental hazard from the injudicious and excessive application of agrochemicals on crops has been a key issue for the industry in recent times. Additionally, the risk to human health has also led to stringent regulatory framework around the use of synthetic chemicals in agriculture. Biofertilizers have emerged as the most feasible solution to these issues and have been gaining considerable market acceptance since the time they were first introduced. Biofertilizers, in addition to providing an eco-friendly option, also maintain the soil and crop health with increased efficiency. Biofertilizers are produced using human and organic wastes such as struvite and compost and have emerged as the clear substitutes for chemical-based fertilizers owing to their environmental friendly characteristics coupled with serving the same application areas. Biofertilizers can be broadly classified as nitrogen fixing and phosphate solubilizing. In addition, owing to recent technological advancement, zinc and sulfur solubilizers and potash mobilizers have also been identified as biofertilizers.
Favorable regulatory scenario, especially in the U.S. and the European Union, is expected to be a key driving factor for demand over the next six years. The EU “Common Agricultural Policy” promotes the use of biofertilizers and organic farming by providing for up to 30% of payment as direct green payment. Biofertilizers are also being promoted in developing markets such as India, with the introduction of ‘National Project on Development and Use of Bio fertilizers’ by the Indian government as part of its five year plan. The project aims to increase the production, distribution and utilization of biofertilizers. China, the world largest agricultural market, has been promoting biofertilizers by providing companies manufacturing organic products with tax holidays and exemption of VAT, excise and agricultural tax. In addition, the low price of biofertilizers compared to chemical based fertilizers has also been boosting the demand for biofertilizers. However, lack of awareness amongst the farmers hailing from developing countries has been one of the major factors hindering the market growth. The global biofertilizers market was valued at USD 420 million in 2012 with North America being the most dominant market. Asia Pacific would witness increased demand due to increased agricultural activities in India and China. Chinese cereal production grew by close to 4% in 2012 to reach 476.5 million tons and is expected to increase further to 485 million tons in 2013 as forecasted by FAO. India also witness strong agricultural growth with cereal production reaching an all time high of 240.9 million tons in 2012 as compared to 233 million tons in 2011.
Key product segments analyzed in the report include nitrogen fixing biofertilizers and potash soluble biofertilizers. Other biofertilizers such as potash mobilizing, zinc and sulfur solubilizing have been accounted for in the study. Nitrogen fixing biofertizers were the largest product segment in 2012 and accounted for over 75% of global revenue. Growing demand for nitrogen fertilizers is perceived to be a key factor for nitrogen fixing biofertilizer market development. The overall consumption of nitrogen in all forms of fertilizers was over 100 million tons in 2012, which is over 60% of the overall fertilizers market. Nitrogen fixing biofertilizers are made up of mixed strains of various nitrogen fixing bacteria’s such as Rhizobium, Azospirillum, Acetobactor and Azotobactor, and help improve nitrogen yield of the soil and as well as its organic and microbial population. There is excessive consumption is regions of South Asia and South America due to increased agricultural activities.
Biofertilizers market revenue share, by product, 2012
Phosphate solubilizing biofertilizers was the second largest product segment in the market and accounted for close to 15% of global revenue in 2012. These are also expected to be the fastest growing products, at an estimated CAGR of over 15.5 % from 2013 to 2020. These biofertilizers contain phosphate solubilizing bacteria which hydrolyze organic and inorganic phosphate from inorganic compounds. 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. The use of biofertilizers increases the availability of phosphates to soil and thereby increase the mineral intake by the soil. The other available form of biofertilizers includes potash mobilizing and mineral (Zinc and Sulfur) solubizing biofertilizers.
The key application segments analyzed in the report include seed treatment and soil treatment. 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.
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 in 2012, 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 of the region 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 forecast period owing 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 as against seed treatment. South America is expected to witness 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.
The global biofertilizers market is fragmented with large number of domestic companies focusing on regional markets. CBF China Biofertilizers AG and Novozymes A/S were the largest players in the market and supply biofertilizers majorly to North America and Europe. The other key players in the market include Agri Life, Antibiotice S.A, Biomax, Mapleton Agribiotec, Labiofam S.A. and Symborg S.L among others.