Market Trends of Ammonium Nitrate Industry
Agriculture Segment Dominates the Demand for Ammonium Nitrate
- In the agricultural industry, fertilizers enrich the growth of essential nutrients for plants, which provide healthy growth and keep them disease-free. Various fertilizers are available in soluble, dry crystalline, and time-release forms. Ammonium nitrate is one such fertilizer used to provide adequate nitrogen levels to plants.
- Ammonium nitrate provides both immediate and sustained nitrogen nutrition for plants. Roots readily absorb the ammonium fraction, while the nitrate fraction is slowly converted from ammonium by soil microorganisms. Vegetable growers often prefer ammonium nitrate for its immediate availability of nitrate.
- Rashtriya Chemicals and Fertilizers Limited (RCF), an Indian central public sector under the Ministry of Chemicals and Fertilizers, paid a total of INR 212.40 crore (USD 25.5 million) for FY 2021-22, which is used to enhance the production of Ammonium Nitrate (AN) melts from its existing plant from 150 thousand metric tons to 19 thousand metric tons per annum by optimal utilization of existing infrastructure.
- As per IBEF, India's agricultural products exports stood at USD 43.37 billion in FY22, which shows the growth in the consumption of ammonium nitrate fertilizers. The more crops cultivated, the more will be will the usage of ammonium nitrate fertilizers use.
- As per Thyssenkrupp AG, approximately 80% of the yearly generated ammonia is primarily applied in producing fertilizers. Fertilization enhances plant nourishment, stimulates plant development, elevates crop excellence, and ultimately upholds and potentially boosts soil fertility.
- Hence, with the rapidly growing agricultural activities worldwide, the demand for solid ammonium nitrate is expected to increase over the forecast period rapidly.
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North America Region to Dominate the Market
- North America accounts for the largest share of the demand for ammonium nitrate in the global market.
- In North America, the United States provides the primary market for the agricultural industries, though Canada's fertilizer industry has seen growth in the near past.
- According to the United States Department of Agriculture (USDA), the Biden-Harris administration is increasing US-made fertilizer production to counteract and counter the rising prices for the farmers caused by the war in Ukraine. In September 2022, the government announced to offer a grant of USD 500 million to boost domestic fertilizer production. The administration's fertilizer expansion program is part of a government-wide effort to increase competition in the agricultural market.
- The agriculture industry is a major contributor to the Canadian economy. According to Agriculture and Agri-Food Canada (AAFC), Canada was the world’s fifth largest agricultural exporter in 2022. During 2022, the agriculture and agri-food sectors of Canada generated USD 143.8 billion (around 7.0%) of Canada's gross domestic product (GDP), by providing safe, nutritious, and sustainable food for the world.
- Canada's fertilizer industry has many manufacturers and wholesale and retail distributors of nitrogen fertilizers, including ammonium nitrate. The country also has a vast export market.
- As per FERTILIZER CANADA, the Canadian fertilizer industry supports 76,000 jobs in Canada. The fertilizer industry creates USD 23 billion in annual economic activity in Canada. 12% of the world's fertilizer supply comes from Canada.
- The enormous demand for ammonium nitrate results from the growing demand for ammonium nitrate fuel oil and increased demand for explosives in defense.
- The U.S. Bureau of Mines has a continuing program to study the products from explosives and to identify explosives that can be used safely underground. This enables more advancement in explosives made of ammonium nitrate in the United States.
- As per the U.S. Congressional Budget Office, CBO has projected the discretionary spending in defense and military of USD 828 billion in FY 2023, a 4% growth in defense spending from FY 2022. This enables an increase in the production of explosives for military purposes in the country.
- The fertilizer segment is projected to grow owing to the dynamic growth of agricultural activities in the region over the forecast period.
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