Phosphoric Acid Market - Forecasts from 2022 to 2027

The phosphoric acid market was evaluated at US$44.404 billion for the year 2020, growing at a CAGR of 3.58%, reaching a market size of US$56.788 billion by the year 2027.

Phosphoric acid is a type of inorganic acid that is primarily derived from phosphate rocks. This acid is colourless and odourless, and non-toxic in nature. Phosphoric acid is often considered a non-volatile and crystalline liquid. There are wide applications of phosphoric acid that include fertilizer production and as an additive in food and beverages, along with some uses in pharmaceutical applications. The market for phosphoric acid is primarily driven by the fact that the globally growing demand for food due to the constantly increasing global population has led to an upsurge in agricultural output. This, in turn, acts as a catalyst for market growth as the majority of the phosphoric acid that is produced globally is used for manufacturing fertilizers. Additionally, the wide application of phosphoric acid in processed food and beverages as an additive for the enhancement of taste, along with the globally growing market for processed foods and beverages, is also a key factor playing a significant role in shaping the phosphoric acid market growth during the next five years. The strict rules and regulations by the governments across several countries have led to increased adoption of phosphate fertilizers for the safety of food, which is also positively impacting the market growth throughout the forecast period.

However, the demand for phosphoric acid may be restrained because many countries are now increasingly adopting sustainable agricultural practices, which have further led to the adoption and development of sustainable options such as micronutrients and organic chemicals, among others. Thus, the increase in the adoption of organic products will further slow down the demand for phosphate fertilizers. Thus, fertilizers are one of the major applications of phosphoric acid in fertilizer manufacturing, among others. Additionally, the outbreak of novel coronavirus disease is further anticipated to negatively impact the market growth during the short run owing to the fact that the decline in the manufacturing activities due to a temporary halt in the manufacturing output of various industries led to a decline in the demand for phosphoric acid as well. Furthermore, the trade barriers led to a decline in exports of fertilizers and other products in which phosphoric acid is used. This, in turn, has led to a decline in the consumption of phosphoric acid globally, which is hampering the market growth to some extent, especially during the short run.

Globally growing food demand

One of the prime factors supplementing the constantly growing demand for phosphoric acid is the globally growing food demand. Simultaneously, with the growing demand for food, the demand for fertilizers has also increased globally. The growing population, along with significant growth in the urban population in both developed and developing economies, are some of the key factors bolstering the growing food demand globally. According to the data provided by the United Nations, the global population is expected to reach 9.7 billion by the year. The growing population is increasing the pressure on limited available resources as rapid industrialization and urbanization has been one of the major factors which have led to a deterioration in the quality and the quantity of the available resources such as land, air, and water, among others. Thus, with limited resources, the output required is more. This has increased the propensity of farmers toward an increasing production output which can be done in two possible ways, which are the expansion of agricultural land and enhancement of crop productivity on the existing lands. However, due to industrialization and urbanization, the expansion of agricultural land is considered comparatively tougher, which has led to an increased usage of urban farming practices, which further leads to an increase in the adoption of fertilizers and other nutrients required for the enhancement of crop growth. Thus, playing a significant role in shaping the demand for phosphoric acid for fertilizer production.

Key Developments in the market

There is a significant volume of companies working in the phosphoric acid market. However, some have solidified their position as the leading providers in this industry. These players are involved in a plethora of investments, product launches, and R&D as a part of their growth strategies to strengthen their position further and provide better products and services to their customers worldwide, which is expected to propel the growth of the market in the coming years. For instance, recently, in August 2020, OCP, one of Morocco’s phosphates and fertilizers manufacturing companies, announced a partnership with German and Belgian partners, Budenheim and Prayon, to build a new plant for the production of purified phosphoric acid to enhance the production output for meeting the growing demand. Also, in March 2019, PhosAgro, a chemical holding company based out of Russia that produces fertilizer, phosphates, and feed phosphates, announced the launch of a new project in which a new modern phosphate-based fertilizer production facility and energy plant are planned to be constructed at the company’s Metachem production site with an estimated investment of RUB 23 billion. In this project, the up-gradation and overhaul of the phosphoric acid are also planned with an aim to boost the output capacity to 500 tonnes per year. Also, major companies in developing economies have enhanced their production output to meet domestic as well as international demands.

The phosphoric market has been segmented on the basis of application, process, and geography. By application, the segmentation of the market has been done into fertilizers, food and beverages, pharmaceuticals, and others. By process, the market has been classified as wet process and thermal process. Furthermore, on the basis of geography, the phosphoric acid market is distributed in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.

Fertilizers to hold a significant share

By application, the fertilizer segment is anticipated to hold a promising share in the market owing to the fact that the majority of the acid is used in the production of fertilizers. Furthermore, the globally growing demand for food due to the increasing population is one of the key factors augmenting the demand for fertilizers in many parts of the world. Also, the surging exports of fertilizers are another additional factor that is bolstering the growth of this segment over the next five years. The food and beverage application segment is projected to witness promising growth due to the fact that phosphoric acid is being increasingly adopted in the industry as a food additive because of its evolving properties for processed food and beverages. Thus, a significant increase in the demand for processed food and beverages is a major factor supporting the growth of this segment throughout the next five years.

APAC to hold a noteworthy share

By geography, the Asia Pacific region is expected to hold a significant market share throughout the next five years. The region also boasts of being a major producer of phosphoric acid, with China being the leading country. Also, the presence of a vast agricultural sector in the region due to the world’s largest economies, such as India and China, is a major factor that has further supported the significant share in the market throughout the forecast period. Additionally, the presence of a vast population base in the region is also supporting the region’s share in the market over the course of the next five years. However, the outbreak of the novel coronavirus disease is expected to hamper the market growth to some extent during the period of short-run as numerous manufacturing plants across the regions temporarily suspended their operations due to the non-availability of raw materials, labour, and disruption in the supply chain.

Impact of the COVID-19 pandemic

The COVID-19 pandemic had a significant influence on several industries. The world economy had been on a downward trajectory as a result of the shutdown of most significant sectors. The outbreak had an impact on the phosphoric acid sector as well. As a result of the disruption of most main supply and manufacturing lines, the market experienced acute shortages. Furthermore, since phosphoric acid is primarily used in the production of fertilizers, it also led to a decrease in crop production. This was accompanied by a shortage of food and essentials among people, leading to inflation of prices during the pandemic. However, most governments were quick enough to address the issue and tackle the shortages. Moreover, as countries throughout the world reduce COVID-19 standards, the industry is anticipated to increase in demand. The resumption of major industries is expected to further help in raising the market demand.

Competitive Insights

Prominent/major key market players in the phosphoric acid market include The OCP Group, novaphos corporation, and Nutrien Ltd, among others. The players in the phosphoric acid market are implementing various growth strategies to gain a competitive advantage over their competitors in this market. Major market players have been covered along with their relative competitive processes and strategies. The report also mentions recent deals and investments of different market players over the last few years. The company profiles section details the business overview, financial performance (public companies) for the past few years, key products and services being offered, along with the recent deals and investments of these important players in the phosphoric acid market.

Segmentation

By Application

• Fertilizers
• Food and Beverages
• Pharmaceutical

By Process

• Wet Process
• Thermal Process

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Europe
• Germany
• France
• UK
• Italy
• Middle East and Africa
• UAE
• Saudi Arabia
• Asia Pacific
• Japan
• China
• India
• South Korea
• Taiwan
• Thailand
• Indonesia