There is tremendous growth potential for potassium sulfate demand in Brazil in 2022
There is tremendous growth potential for potassium sulfate demand in Brazil in 2022
The global production and consumption of potassium sulfate are approximately 6.4 million tons and 6.47 million tons, respectively, both showing a 4% decrease compared to the previous year. How will the consumption of potassium sulfate develop in major regions globally? Wang Ling, a potassium fertilizer analyst at Argus, provided an analysis during the 2023 World Potash Conference and Gelimu Salt Lake Forum Potash Summit: The demand in the United States and Europe will recover to some extent, while the growth potential for demand in Southeast Asia and India is limited. The market with the greatest potential for demand growth is Brazil.
China accounts for approximately 61% of global potassium sulfate consumption, making it the largest consumer market. In 2022, logistics and transportation disruptions caused by the COVID-19 pandemic affected fruit and vegetable cultivation, leading to a decline in potassium sulfate demand. It is reported that China's potassium sulfate consumption in 2022 was approximately 3.9 million tons, slightly lower than in 2021.
Europe also experienced a decrease in demand. Last year, due to cost pressures, potassium sulfate demand in Europe dropped to just over 800,000 tons. It is projected that potassium sulfate consumption in Europe will recover to 1 million tons in 2023.
The United States is also one of the major consuming countries for potassium sulfate internationally, with a consumption of 280,000 tons in 2022. It is worth noting that this year has seen the best relief from drought in the United States since 2020, and favorable climatic conditions are expected to increase the yield of fruits and other cash crops, thereby boosting the demand for potassium sulfate.
Potassium sulfate consumption in Southeast Asia is relatively low, totaling about 69,000 tons annually. China is the main source of potassium sulfate in Southeast Asia, and due to the impact of China's export inspections, the supply capacity of potassium sulfate in Southeast Asia is relatively weak, leading to higher prices and a decrease in demand.
Although China faces an oversupply of potassium sulfate, there are several uncertainties in the international market. To reduce dependence on imported potassium resources and ensure domestic supply, China implemented export inspections for potassium sulfate starting from October 15, 2021. In 2020, China accounted for 16.8% of global potassium sulfate exports, which decreased to 5.7% by 2022. The decrease in China's potassium sulfate export share has been compensated by increased exports from regions such as Egypt, the United States, and Canada. Currently, China continues to implement export inspections in 2023, making it difficult for Chinese potassium sulfate to return to the international market in the short term.
Potassium sulfate consumption in India is also relatively low, mainly used in tobacco and horticulture. The consumption of potassium sulfate in India was around 60,000 tons in 2022. Due to the overall low level of fertilizer application in India, the potential for future growth in potassium sulfate demand is also very limited.
The market with significant potential for future potassium sulfate demand growth is Brazil. It is reported that Brazil's potassium sulfate consumption is approximately 50,000 tons, and its supply of potassium sulfate is not sufficient. However, the currently high fertilizer prices continue to impact the burden on farmers.
Wang Ling introduced that the current total international trade volume of potassium sulfate is approximately 2 million tons, and it is expected to remain relatively stable over the next five years. The main regions for imports are concentrated in Western Europe, Asia, Africa, and the United States. In the future, the regions with potential import growth for potassium sulfate are mainly concentrated in Africa and Latin America.
