February 7, 2017
A Dynamic Commodities Exclusive
Fertilizers are a complimentary commodity in the production of agricultural commodities and a key input component. Fertilizers can be organic or inorganic substances and they supply essential nutrients for the growth of plants when added to soil.
The three main types of fertilizers used by agricultural producers are nitrogen, phosphorus, and potassium or potash. As the demand for food increases around the world as a result of exponential population growth, so does the demand for fertilizers.
The world’s leading fertilizer consuming nations are the countries with the biggest populations and most arable land for growing crops. China, India, the United States and Brazil are the world’s leading consumers.
When it comes to production, Canada, Russia, Belarus, China and Germany are the world’s leading potash producers. China, India, Russia, and the U.S. are the world’s leading nitrogen producers. When it comes to phosphorus or phosphates, China, Morocco and the Western Sahara, the U.S., Russia, Jordan, Brazil, Egypt, Tunisia, Peru, Israel, and Saudi Arabia are the major producers.
The world has experienced exponential population growth over recent decades. In 1960 there were around 3 billion people on planet earth and in 2017 global population stands at over 7.3 billion. As population increases, so does the demand for agricultural crops to feed an ever growing number of hungry people. Increasing demand for crops means that the demand for fertilizers that support those crops with nutrients grows alongside. Unlike the markets in corn, soybeans, wheat and other crops that trade both on futures exchanges and in the physical markets, fertilizers trade in the physical market and there are no liquid futures or options that trade on exchanges. However, fertilizers are a critical cost of goods sold component when it comes to all agricultural commodities and are key commodities when it comes to feeding the world and supporting the agricultural sector.
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