Global Sodium Nitrate Market to Grow 3.6% Through 2020
By Business Wire News
By Business Wire News
Technavio analysts forecast the global sodium nitrate market to post a CAGR of 3.6% by 2020, according to their latest report. The demand for sodium nitrate is being fueled by its use in the manufacturing of fertilizers.
“Chile and Peru are the global leaders in the production of sodium nitrate, also known as Chile or Peru saltpeter. This chemical compound is used for a wide range of applications, including food preservation, metal treatment, nitric acid production, fireworks, industrial explosives, rocket propellants, and ceramics and glass,” said Technavio lead metals and minerals research analyst Chandrakumar B J. “In the agricultural segment, sodium nitrate is used to make water-soluble fertilizers and in the pharmaceutical segment, it is used in the treatment of tooth sensitivity.”
In terms of volume, the global sodium nitrate market in the agriculture industry was estimated at 1,283 thousand metric tons in 2015 and is expected to reach 1,576 thousand metric tons by 2020, growing at a CAGR of 4.2%. This is the largest and fastest growing segment in the market.
Sodium nitrate is used to make sodium-based fertilizers as a critical feedstock. It is water-soluble, so it acts as an immediate source of nitrogen, which is essential for fruits, vegetables, and other crops.
“Sodium nitrate accounts for 60%-70% of the total cost of the fertilizer. The US National Organic Program has approved its use as a supplemental source of nitrogen in areas where carbon-based organic nitrogen sources are not sufficient to meet the nitrogen demand of growing crops,” said Chandrakumar B J.
About 44% of the global demand for sodium nitrate is from APAC because of the growing demand for nitrogen-based fertilizers. China and India are the largest markets for sodium nitrate in APAC. These countries are the leading consumers of fertilizers and their raw material nutrients. APAC is deficient in nitrate salt reserves, which leads to an increase in the import of these products. The use of fertilizers per hectare is low in this region compared to that of North America and Europe but APAC’s growing population and the corresponding greater demand for food will lead to increased consumption of fertilizers.
Technavio’s expert chemicals and materials research analysts have identified the following three market growth factors:
- Introduction of subsidies in developing nations
- Emergence of biofuels
- Growing demand for fertilizers
Introduction of subsidies in developing nations
Agrarian economies such as India and Bangladesh are deficient in sodium nitrate reserves, which requires these countries to import fertilizers for their feedstock. This will lead to an increase in prices, thereby affecting the purchase of fertilizers by farmers and other end-user segments.
In addition, price changes in the global market can potentially affect food security in the absence of intervention by governments. The price of fertilizers in countries in sub-Saharan Africa and Southeast Asia is regulated through heavy tariff duties and subsidy grants. Governments of these countries offer retail price administration of fertilizers and incentivize fertilizer manufacturers to ensure low prices, which leads to food security.
Emergence of biofuels
Growing concerns regarding environmental pollution have led organizations around the world to shift to the use of biofuels such as biodiesel and ethanol. Stringent government regulations mandating the blending of automobile fuels with alternative fuel sources to increase fuel efficiency and reduce pollution are coming into effect.
Approximately 32% of the corn cultivated in the US is used for the production of ethanol. We expect this to increase by approximately 30% by 2020. Biofuels are derived from natural products such as corn, sugarcane, canola, and soybeans. Fertilizers containing sodium nitrate are used for the cultivation of such crops.
Growing demand for fertilizers
The global population reached 7.3 billion in 2014 and with an increase in average life expectancy, the global population will likely reach 7.8 billion by 2020 and 9 billion by 2050. A growing population will lead to the increased consumption of grains, meat, and value-added food products. It is necessary to increase crop yields to cope with the growing demand for food products, leading to a rise in the demand for fertilizers.
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