China, India and the United States were the world’s largest consumers of nitrogen fertilizer in 2021, according to data referenced by CVR Partners.
The United States is the world’s largest exporter of coarse grains, accounting for 29% of global exports and 27% of global production for the fiscal year ended December 31, 2021.
A substantial amount of nitrogen is consumed in the production of these crops to increase yields.
Fertecon Limited estimates for 2021 indicate that the United States is the world’s third largest consumer of nitrogen fertilizer and the world’s largest importer of nitrogen fertilizer.
Fertecon is a reputable agency that provides market information and analysis on fertilizers and raw materials for fertilizer and related industries, as well as for international agencies.
Fertecon’s estimates show that the United States accounted for 12% of total global nitrogen fertilizer consumption by 2021, with China and India being the top consumers accounting for 22% and 15% of total global nitrogen fertilizer consumption, respectively.
Considering all types of fertilizers, Brazil ranked as the world’s largest importer in 2021, with external purchases of these products of US$15,165 million, followed by the United States (US$10,289 million) and India (US$9,117 million).
CVR Partners explained that North American producers of nitrogen fertilizers predominantly use natural gas as raw material.
Over the past five years, U.S. oil and natural gas reserves have increased significantly due to, among other factors, advances in shale oil and gas extraction, as well as relatively high oil and gas prices.
More recently, natural gas prices in Europe and Asia have increased significantly since 2020 due to reduced production volumes and increased global demand as economies began to recover from the global Covid-19 pandemic.
In Europe, rising prices for natural gas as a feedstock have led to the closure of multiple fertilizer plants, and some European countries have restricted the industrial use of natural gas, resulting in deteriorating economics for fertilizer production in the region.
In addition, China and Russia have restricted fertilizer exports to ensure domestic availability.
In North America, natural gas prices also increased throughout 2021, but higher nitrogen fertilizer prices more than offset higher natural gas costs.
As a result, CVR Partners concludes that North America remains the low-cost region for nitrogen fertilizer production.