Market Trends of Australia Agrochemicals Industry
Growing Fertilizer Usage Supports the market
- Australia's agricultural industry relies heavily on fertilizers, making them a vital part of the national economy. Fertilizer Australia, the leading industry association, represents manufacturers, importers, distributors, and related service industries. Members of Fertilizer Australia supply more than 95% of the fertilizers used in the country. These fertilizers, essential for providing plant nutrients, contribute approximately USD 8 billion to Australia's GDP. This high GDP of the contribution aids the growth of the segment.
- Due to limited domestic manufacturing capacity, Australia depends significantly on imports to meet its agricultural needs. For instance, nitrogen fertilizer imports increased by 18% from 2020 to 2023. Additionally, the rising cost of fertilizer usage for cropping systems has led to higher consumption. According to the Australian Bureau of Agricultural and Resource Economics (ABARES), the average cost of fertilizer for cropping farms rose from USD 138.6 thousand in 2022 to USD 222.4 thousand in 2023. These factors enhance the value of fertilizer consumption, supporting market growth.
- Data from the International Fertilizer Association (IFASTAT) indicates that fertilizer consumption in Australia grew during the study period, increasing from 2.5 million metric tons in 2019 to 2.7 million metric tons in 2022. Urea, the most commonly used nitrogen fertilizer, is particularly favored for crops such as wheat, cotton, and sugarcane. The significant contribution to GDP, coupled with rising imports and increasing consumption, drives market growth.
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Declining Grain and Cereal Production Boosts Agrochemical Use
- In Australia, cereals are a crucial component of a healthy diet. The country grows major cereals such as wheat, barley, oats, canary, and triticale. These crops often suffer yield losses due to pests like cutworms, armyworms, mites, helicoverpa, and aphids. Barley, like other cereals, is vulnerable to a variety of insect pests. In the northern growing region of Australia, aphids are the main pest affecting barley. Research shows that aphid feeding significantly reduces barley yields in this area. For instance, according to FAO, Australia's barley production decreased from 14.6 million metric tons in 2021 to 14.3 million metric tons in 2022. This year-on-year decline in barley and other cereal production, caused by pest damage, is driving increased demand for crop-protection chemicals, thereby boosting market growth.
- Supportive initiatives promoting the use of agrochemicals, such as fertilizers in cereals and grains, are major drivers of market growth. The Grains Research and Development Corporation (GRDC) has invested USD 17.2 million in a four-year project led by the University of Melbourne, in collaboration with several research organizations. This project focuses on using enhanced-efficiency nitrogen fertilizers in the grains industry to reduce GHG emissions and improve Nitrogen Use Efficiency (NUE). The project will run for four years, with results expected to be available to growers by 2028. Therefore, the decreasing production of cereals due to pest infestations and these supportive initiatives are driving market growth during the forecast period.
