Qatar, Saudi Arabia and Oman have ranked among the top 15 fertiliser exporters in 2023, according to an expert at Gulf Petrochemicals and Chemicals Association (GPCA).
GCC’s fertiliser production capacity has grown significantly over the past decade, with a 4.86 % CAGR between 2013 and 2023, clocking additional 13.2mn tons, noted Noora Mukhtar, Research Specialist at GPCA.
GCC region, with its vast natural gas reserves and strategic location, is establishing state-of-the-art nitrogen production facilities.
The nitrogenous fertiliser segment occupies the larger bulk of the market, where the GCC nitrogen-based fertilisers (mainly urea and ammonia) account for 82.3 % of the regions’ fertiliser portfolio in 2023.
The GCC fertiliser industry remains heavily export-oriented, shipping its products to 63 countries from across the globe. India, USA and Singapore ranked the top three GCC nitrogen export destinations, accounting for 62 % of the total nitrogen export value in 2022.
Although capacity additions in agri-nutrients have been limited in the past couple of years, they played a pivotal role in boosting revenue within the regional petrochemical industry, Mukhtar noted. Record high prices for agri-nutrients were driven by a complex combination of various factors such as rising energy costs, supply and demand dynamics, and geopolitical factors.
With a global focus on ensuring food security for a rapidly growing population, the demand for fertilisers is expected to rise substantially.
The global urea and ammonia demand are projected to reach 300mn tons per year (mtpy) and 290mtpy, respectively, by 2030.
The surge in demand underscores the urgent need for reliable fertiliser suppliers, enabling GCC producers to meet increasing global demands, particularly in major agricultural markets.
Simultaneously, the debate over the use of nitrogen-based products for food security versus fuel is intensifying. The International Maritime Organisation (IMO) targets net-zero GHG emissions by 2050, spurring interest in ammonia as an alternative maritime fuel.
Ammonia’s potential as a zero-carbon fuel is compelling, but it competes directly with its role in agriculture.
This dual demand presents a strategic challenge for GCC producers: should they prioritise meeting the urgent needs of global food security, or capitalise on the emerging market for clean maritime fuel?
Balancing these priorities, GPCA’s expert said, will be crucial in shaping the future of the GCC’s nitrogen investment strategies, ensuring they meet both environmental goals and food supply needs.
The nitrogen fertiliser industry stands at a pivotal moment, marked by evolving investment patterns driven by sustainability and resilience.
Leveraging its resource advantages and strategic initiatives, the GCC region is poised to play a critical role in the future of nitrogen production, GPCA said.
Balancing economic viability with environmental stewardship will be key to the success of these investments.
To facilitate the transition in nitrogen investments, regional collaborations and infrastructure development are gaining momentum.
Investments in research and development are driving market growth, supported by GCC governments through subsidies, financial assistance, and technological advancements. These measures are fostering more favourable conditions for fertilizer adoption across the region, Mukhtar noted.
