The fertilizer market - France (2024)

1.2 A growing world market but a struggling European market

The fertilizer market was estimated at $*** billion in **** and is expected to register a CAGR of *.*% over the period **** - ****[***].

Trends in global fertilizer market size World, **** - ****, in $ billions Source: ****

Asia-Pacific represents the largest fertilizer market, with a market share of around **% in ****, and is expected to reach a CAGR of *% over the period **** - ****. China is the largest consumer, with a **% share of the Asia-Pacific market in ****.

Global agriculture today faces contradictory challenges. On the one hand, global population growth is increasing the pressure on farmers and agribusinesses. On the other, the total area of arable land is shrinking as a result of industrialization and urbanization. Indeed, it is estimated that *.*% of arable land per person was lost between **** and ****[***]. Added to this is a gradual decline in the natural yields of cultivated land, making it vital to develop high-performance fertilizers that respect the fragile environment that can still be exploited.

Since the end of the health crisis, the fertilizer market has been in a state of upheaval, with supply unable to keep pace with the strong demand generated by the economic recovery. Rising prices for natural gas, which accounts for **% of ammonia production costs, forced European producers to ...

1.3 French market trends similar to those in Europe

French production dynamics are similar to those of the European market. As France does not have the resources needed to produce fertilizers on its own territory, it is extremely dependent on imports. It has therefore borne the full brunt of the drop in Russian, Belarusian and Chinese exports and the rise in fertilizer prices. Indeed, according toAgreste, the price of fertilizers and soil improvers rose by **.*% in ****. However, these difficulties have helped to revive the nitrogen product and fertilizer manufacturing sector.

Sales in the nitrogen products and fertilizer manufacturing sector France, **** - ****, € billion Source: ****

After a slow decline since ****, the nitrogen product and fertilizer manufacturing sector (***). By ****, sales have returned to their structural proportions at a value of *.*** billion euros.

Quantities of nitrogen-based fertilizers produced in France France, **** - ****, in thousands of tons Source: ****

Inorganic nitrogen-based fertilizers are the most popular and their production has been increasing since ****. In ****, production reached a record *.* million tonnes of nitrogen fertilizers. Following the trend in sales, production stabilized again in ****, returning to a level of around ***,*** tonnes of fertilizer.

Quantities of natural fertilizer produced in France France, **** - ****, in thousands of tons Source: ****

Natural fertilizers are set to gradually replace chemical fertilizers as a ...

1.4 France highly dependent on imports

France is an extremely import-dependent country. In fact, **% of our fertilizer needs are imported[***], and specifically **% of our nitrogen fertilizer needs in **** according to L'Usine nouvelle.

French fertilizer imports France, **** - ****, in billions of $ Source: ****

French imports, which had fallen slightly in **** due to the health crisis, picked up again in **** to reach a record value of $*.* billion in **** (***). In ****, the value of imports stabilized in line with the French market, returning to a value of $*.*** billion.

Main French fertilizer-supplying countries France, ****, in millions of $ Source: ****

By far the leading supplier country is Belgium, with the equivalent of $*** million worth of fertilizers imported in ****. Only four European countries are among the top ** suppliers. Russia has risen to *th place with $*** million of imports in ****, having been relegated to *th place among French suppliers, despite the sanctions it has had to respect since the start of the war in Ukraine. Interestingly, Trinidad and Tobago, France's **th biggest supplier, ranks very high for such a small country.

French fertilizer exports France, **** - ****, in millions of $ Source: ****

French exports follow the same trend as imports: they fell in **** before rising sharply to reach $*** million in **** (***), then stabilizing again at around $*** million in ****.

Main buyers ...

2.1 National demand undermined by difficult market conditions

French demand for fertilizers has been falling for many years. In fact, mineral fertilizer consumption has fallen by **% in ** years, according to Unifa (***)[***].

Fertilizer consumption France, ****-****, kg/Ha of arable land Source: ****

Fertilizer consumption per hectare of arable land, which was rising until ****, stagnated for a while before declining, despite an upturn during the health crisis. In ****, consumption will be ***.* kg per hectare.

There are several reasons for this drop:

unfavorable weather conditions (***) ; the growth of organic farming, which requires less fertilizer and is gradually taking hectares away from conventional farming; soaring gas prices, due to the Russian-Ukrainian conflict, a major component of mineral fertilizers accounting for **% of nitrogen fertilizer manufacturing costs. By ****, fertilizer deliveries to farmers had fallen by *%[***].

Russia, a major producer and exporter of fertilizers, has been exporting much less volume since the start of sanctions, so French producers have had to find other producers. However, some European factories have slowed down or even stopped production due to the rise in gas prices. In addition, many farmers are still reluctant to buy fertilizers, as prices have tripled in a year, creating a risk of delivery bottlenecks if they all decide to buy at the same time.

In ...

2.2 Geographic concentration of fertilizer demand

As we don't have access to fertilizer demand by department, we can use the departmental map showing the distribution of agricultural surface area (***) in France in **** to get an idea of which departments consume the most fertilizer.

Source: ****

France's agricultural land is geographically concentrated in the north and west of the country, which is where demand for fertilizers is highest on a national scale.

2.3 Practices and profiles in French fertilizer demand

The practice of smoothing purchases:

French farmers are increasingly trying to establish a smoothed pattern of fertilizer consumption. This smoothing behavior enables them to have an average risk spread over a full year, which results in better annual visibility of production costs and more controlled risk management. as prices fluctuate throughout the year, and can double in the course of the same season, it is advisable to follow fertilizer prices closely and to obtain as much information as possible, so as to buy at the most advantageous time.

However, not all farmers are able to smooth out their purchasing behavior. To be able to follow this purchasing logic, a minimum consumption volume is necessary to make it possible to split up purchases. When volumes are sufficient, farmers are advised to make their fertilizer purchases in tranches of **% of the total quantity they need[***].

changing farmer profile:

The profile of farmers has changed significantly over the last decade, and we are witnessing a phenomenon of aging farmers. According to the latest census published by the French Ministry of Agriculture, the average age of farmers in **** is **.*, compared with **.* in ****. This illustrates a lack of generational renewal in this sector.

Share of farmers ...

2.4 The evolution of the French agri-food market, closely linked to fertilizer demand

French demand for fertilizers (***). Fertilizer demand is in fact an increasing function of these two markets.

Breakdown of European agricultural production by value Europe, ****, in Source: ****

France is Europe's leading agricultural producer by value, and its production in **** represented **% of European production in the same year. This figure explains the volume of fertilizer consumption in France. Indeed, according to the European website Toute l'Europe.eu, French agricultural production in **** was worth ** billion euros, out of a European total of around *** billion euros, up **.*% on **** and ** billion euros on ****.

French production has been rising steadily for many years, but will fall very slightly, by *.*% between **** and ****.

Agricultural production in France France, **** - ****, in € millions Source: ****

France's agricultural strength explains the high demand for fertilizers. This demand is increasingly moving towards natural fertilizers for ecological and health reasons. The negative effects of fertilizers are increasingly reported, notably soil pollution and the infiltration of chemical substances into groundwater near farms.

3.1 Fertilizer production in decline

This section considers NAF code **.**Z entitled "Manufacture of nitrogen products and fertilizers"[***].

Number of companies in the nitrogen products and fertilizers industry France, ****-**** Source: ****

The number of companies has risen slightly since ****. With *** in ****, we can deduce that the nitrogen products and fertilizers market is not highly concentrated and is continuing to grow. This trend is most likely due to rising raw material prices and the war in Ukraine, which have reduced our imports of Russian fertilizers.

Number of employees in the nitrogen products and fertilizers industry France, ****-**** Source: ****

The number of employees is fairly volatile and varies greatly from one year to the next. Nevertheless, it seems to be contained between *,*** and *,***, and will reach *,*** in ****. In the same year, the average number of employees per company was **.

Geographical distribution of fertilizer manufacturing activity

In France, the main regions producing nitrogen products and fertilizers (***).

Source: ****

In terms of workforce, the regions with the most employees are Bretagne (***).

Source: ****

We note that the regions with the most fertilizer manufacturers and the most employees do not necessarily coincide with the most agricultural regions in France. Occitanie is the region with the highest number of nitrogen product and fertilizer production ...

3.2 Organizing producers and distributors

French producers

TheUnion des Industries de la Fertilisation[***] is an organization whose main objective is twofold: to ensure the satisfaction of agricultural needs in France while limiting the ecological impact of the activity. UNIFA is committed to preserving the environment, promoting rational soil fertilization and controlling the quality of fertilizers on the French market.

All the measures implemented by UNIFA have a common goal, which is the competitive and sustainable development of French agriculture. UNIFA's scope of action is very broad, with its ** members achieving sales of *.** billion euros in ****. The activity of French fertilizer manufacturers is mainly destined for the French market: in fact, of these *.** billion euros in revenues, *.*** billion euros were generated on the French market (***) in ****. Export activity thus remains marginal for French producers[***].

Breakdown of fertilization sector sales France, ****, in UNIFA

Global producers

In addition to the French fertilizer companies grouped together in this federation, the French market remains very much centered on global chemical fertilizer players. The main players are

Eurochem Group AG and PJSC PhosAgro (***) ; Nutrien Limited (***); Yara International ASA (***) ; CF Industries Holdings Inc and The Mosaic Company (***); Coromandel International Ltd (***) ; OCP S.A. (***) ; Israel Chemicals Ltd (***); K+S Aktiengesellschaft (***).

In addition, similar structures ...

4.1 Product typology

There are two main categories of fertilizer: chemical (***).

Chemical fertilizers:

Produced from minerals that undergo a series of chemical transformations enabling their composition to be precisely measured, they are the heart of today's fertilizer market. They offer a number of advantages, such as almost immediate action on soils and plants. They also improve soil properties to make it more fertile, making them highly effective products.

Chemical fertilizers are classified into several categories, the three main ones being :

fertilizers produced from nitrogen (***): there are three nitrogen fertilizers: ammonium sulfate, urea and ammonium nitrate. These fertilizers promote the growth and development of the "green parts" of a plant, i.e. the stem and leaves; fertilizers produced from phosphorus (***): promote flower and seed formation, strengthening the plant's resistance capacity; fertilizers based on potassium (***): increase root and tuber protection, while improving flower/fruit coloration through better resistance to disease.

A second distinction is made within chemical fertilizers, between straight fertilizers, which contain just one nutrient (***), and compound fertilizers, which contain two or three[***].

Natural fertilizers:

In response to growing ecological awareness, another category of fertilizer, natural (***) fertilizers, is being used more and more.

These fertilizers are produced from plant or animal raw materials, and undergo ...

4.2 Fertilizer price trends

Fertilizers are a significant expense in agriculture, and their cost on a farm can vary according to a number of factors, including the characteristics of the production system, the farm's agronomic context, the technical itinerary and the farmer's fertilizer purchasing strategy. According to data from the INOSYS Réseaux d'élevage network, a technical-economic reference system set up by the Chambers of Agriculture and Idele, the cost of fertilizers can be as high as **%.Idele, the cost of fertilizers represents *.*% of the cost of production in a specialized lowland dairy cattle production system[***].

Producer price index for fertilizers and nitrogen compounds, base **** France, **-**** - **-****, in % (***) Source: ****

Producer price index for fertilizers and nitrogen compounds for all markets, base **** France, **-**** - **-****, as a % of sales Source: ****

The producer price indices for the French market and for all markets are slightly different, but they have been following the same trend since early ****. Both have been falling over the past year, after peaking in August ****. This is due to the recent fall in energy prices.

As we saw earlier, the French market is heavily dependent on fertilizer imports, and is therefore overexposed to the international market and subject to the ...

4.3 Certain exogenous factors influence the price of chemical fertilizers

The fact that France's weight on the world market is very low compared to countries such as China, India or Brazil means that French supply and demand movements have no impact on the international market and prices. for example, according to Yara, in the event of a French demand shock, global fertilizer production would have no difficulty in covering it.

A number of exogenous factors have an impact on fertilizer prices in France[***]:

currency exchange rates, and more specifically the euro/dollar parity: movements in the dollar's value against the euro lead to an immediate increase in the price of French imports, and therefore in prices; the price of natural gas: the raw material most widely used in the production of chemical fertilizers, its price today represents up to **% of the price of certain chemical fertilizers; grain prices: the correlation here is weaker, but still significant. A rise in cereal prices leads to an increase in demand, which in turn translates into a cash surplus for producers, whose propensity to buy increases, which can create a demand shock for fertilizers.

4.4 The retail offer

Fertilizer consumption by private individuals represents a marginal share of the fertilizer market in France. Nevertheless, it's worth mentioning this small part of the market here, as the supply of fertilizers for private individuals has quite different characteristics from the rest of the market.

Distribution: the distribution and marketing channels are distinct: private customers buy their fertilizers mainly from garden centers, DIY superstores or over the Internet. Price: prices vary enormously, due to major fluctuations in raw material prices (***) caused by rising energy prices and the war in Ukraine. For example, the price of ammonium nitrate rose from €*** per tonne in December **** to €*** per tonne in December ****, then fell back to €*** per tonne in September ****[***].

To complete these estimates of price ranges, you can carry out a price survey on the website of a DIY superstore or garden center. Below is a price survey of popular products on the Gammvert website:

Source: ****

5. European regulations governing the marketing of fertilizers

The regulations particularly target the use and sale of mineral fertilizers due to their chemical dimension.

EU regulation ****/****, in force since July ****, replaces and repeals regulation (***) no. ****/****, which concerned inorganic fertilizers in particular. This new regulation lays down the rules for making EU fertilizers available on the market:

the European Union's single market has been opened up to fertilizer products (***) previously not covered by harmonization rules; common rules have been established for fertilizer safety, quality and labelling; for the first time, limits have been introduced for toxic contaminants, ensuring a high level of soil protection and reducing risks to health and the environment, while enabling producers to adapt their manufacturing processes to comply with these new limits; optional harmonization is maintained, allowing non-harmonized fertilizers to be made available on the internal market, in accordance with national law and the general rules of free movement; the latest version of the regulation incorporates five amendments adopted by the European Commission via delegated acts, aimed at updating the annexes to the regulation to adapt to technical progress or add new constituent elements[***].

This European regulation does not, however, supersede French national standards. In accordance with article L.***-* of the French Rural Code, fertilizers ...

6. Segmentation

• Borealis Chimie
• Terrial
• Toopi Organics
• Roullier Groupe
• ICL Groupe
• OCI Nutramon
• Gamm Vert (Teract Groupe)
• Jardiland (Groupe Teract)
• Coromandel International Ltd.
• The Mosaic Company
• Yara International
• Nutrien
• EuroChem Group
• Agriconomie
• Frayssinet
• Micropep Technologies
• EuroChem Agro France
• Yara France