May 21, 2024

Down Under Ammonia: Sustainable Fertilizer for Aussie Farms

The Australia Ammonia Market is Estimated to Witness High Growth Owing to Increasing Agricultural Production

The Australia ammonia market is primarily driven by increasing demand from agricultural sector for production of nitrogenous fertilizers. Ammonia is considered as a building block for nitrogenous fertilizers such as ammonium nitrate, ammonium sulphate and urea which are extensively used for activities related to crop cultivation. The advantageous properties of ammonia which include nitrogen content of about 82% and solubility in water aids its widespread usage in fertilizer production. Increasing population and growing export economy have substantially boosted agricultural output in the country. This has positively influenced demand dynamics of ammonia over the years.

The Global Australia ammonia market is estimated to be valued at US$ 934.85 Million in 2024 and is expected to exhibit a CAGR of 6.4% over the forecast period from 2023 to 2030.

Key Takeaways
Key players operating in the Australia ammonia are Incitec Pivot Limited, Yara International ASA, Orica Limited, and Wesfarmers Chemicals, Energy & Fertilisers. Key players like Incitec Pivot Limited are investing heavily towards expansion of production facilities to cater increasing domestic demand.

The Australia ammonia market provides significant opportunities for market players in terms of geographical expansion and product portfolio diversification. Growing exports of agricultural commodities offer scope for ramping up of ammonia production volumes.

Global demand for ammonia is projected to rise substantially over the coming years owing to increasing requirement of nitrogenous fertilizers from agriculture sector. This provides opportunities for Australian producers to strengthen their exports globally and establish long term supply agreements.

Market Drivers
Increasing agricultural production and growing exports of major crops like wheat and barley from Australia are the major factors augmenting the demand for ammonia in the country. According to government estimates, agricultural export earnings may touch US$63 billion by 2030 from current levels. This rising crop production would necessitate higher usage of nitrogenous fertilizers thereby positively impacting ammonia demand.

Strong foreign investments in the sectors of mining and energy have enhanced production of key ammonia feedstocks such as natural gas and coal over the past few years. This has improved supply security of raw materials for domestic ammonia manufacturers.

PEST Analysis
Political: The government policies related to fertilizer production and usage could affect the ammonia market. Any restrictions or incentives would impact domestic production and trade.
Economic: The cost of natural gas is a major factor influencing the ammonia market. As a key production input, fluctuations in gas prices directly affect the overall costs and supply of ammonia.
Social: Consumer demand for agricultural produce drives the demand for ammonia-based fertilizers. Changes in dietary habits or governmental initiatives could shift farming practices and requirements for ammonia.
Technological: New technologies that enhance efficiency in manufacturing processes or enable use of renewable energy sources would help reduce production costs. Increased mechanization of farming practices may also impact demand patterns over time. Process innovations to utilize by-products support market sustainability.

Geographical regions of concentration
Within Australia, the state of Queensland has the largest share of the ammonia market in terms of value, led by the city of Townsville. This is due to the presence of large-scale manufacturing plants and ports that aid distribution to domestic consumers as well as exports to key Asian markets. New South Wales and Victoria also contribute significantly owing to their prominent agriculture industries.

Fastest growing region
Western Australia is projected to be the fastest growing region for the Australia ammonia market during the forecast period. Major capacity expansions are planned in the mineral-rich Pilbara region to cater to demand from the resource sector including iron ore mining. Supportive government policies for clean energy also contribute to new project investments aimed at producing ammonia as a hydrogen carrier.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it