Ammonia is a colorless, non-toxic gas that emits a distinct color, and is used as a building block chemical. It’s a key component in many products we use daily. It is found in soil, water, plants, animals, and humans. Ammonia is also an important building block for ammonium-nitrate fertilizer. This fertilizer releases nitrogen which is vital for the growth and development of plants, and most of the ammonia produced worldwide is used for fertilizing food production. Because of their high nutritional content, food crops often negatively impact soil nutrients. As such, most farmers use ammonia-based fertilizers to keep their soil productive and maintain healthy crops. Due to rising food demand and increasing dependence on fertilizers, the global ammonia market is expected to grow.
The ammonia Market is expected to reach USD 114.76 billion by 2028. This is a 6.6% CAGR for the forecast period (2021-2028) as the market was valued at USD 73.17 billion in 2021.
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Ammonia Market: Drivers
Increased fertilizer use and agricultural production to drive market growth
The increasing global population and rising food demand will increase fertilizer industry revenue as the fertilizer industry is essential to crop yields and agricultural productivity. The fertilizer industry is essential for producing nutrients vital to plants, like nitrogen, phosphorus, and potassium (NPK). Commercial agriculture is growing in popularity worldwide, leading to the increased use of nitrogenous fertilizers. The demand for oil seeds and grain crops also drives these fertilizers.
Most of the ammonia used in agriculture is used to supply nitrogen to plants, and it produces fertilizer materials such as urea, ammonium, and nitrate. The compound can be used to oversee the lawn and maintain it or to plant new grass.
Ammonia Market Key Trends:
The Agriculture Industry is expected to hold market dominance, and holds a market share of approximately 80%. It is the largest consumer of ammonia due to its use in fertilizers. Its use in fertilizers could increase over the forecast period.
Even though the long-term outlook of global agriculture remains largely unchanged following the pandemic, agricultural production growth rates are steadily declining.
Developed and emerging countries will see an increase in fertilizer demand due to the expectation of higher fertilizer efficiency and greater recycling of organic nutrients.
Global fertilizer demand is declining, but ammonia-based products do better. The areas with the highest growth are South Asia, Latin America, and Southeast Asia. This is due to significant increases in urea intake, especially in Latin America and East Asia (including China), for its industrial sectors.
Suggested Reading: What to Expect in the Ammonia Solution Market
Ammonia Market: Restraints
High levels of NH3 can cause adverse effects on the human body and slow market growth
Most people can be exposed to NH3 by inhaling vapors or gas. Because NH3 is naturally found in cleaning products, people are more susceptible to exposure. It is a fast-acting chemical that reacts with the skin, eyes, and respiratory tract. Low ammonia concentrations in solutions or air may cause severe skin or eye irritation, however, higher concentrations can cause serious burns and injury. For example, concentrated solutions can cause severe skin burns, permanent eye damage, blindness, and other adverse effects.
Recent developments:
- OCI has partnered up with majors to commercialize ammonia in the coming years.
- Qatar approved major mergers, acquisitions and transfers of ammonia producers. This will enable a rapid rise in output and increase the competitiveness of the companies.
- OCI NV will create a maritime value chain and commercialize ammonia/methanol in future shipping fuels thanks to a partnership between Hartmann Group and MAN Energy Solutions.
