Biofertilizers 2021

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A biofertilizer is a product containing a living microorganism which promotes growth by increasing the supply or availability of primary nutrients to the host plant. Confusingly, biofertilizers also sometimes go by other names such as: microbial inoculants, soil inoculants, bioinoculants, microbial based fertilizers, bioenhancers or phytostimulators, Plant Growth Promoting Rhizobacteria (PGPR's), or rhizoremediators.

Biofertilizers are often times referred to and defined as a "sub-category" of biostimulants. The most important types of biofertilizers are N-fixing, phosphorous and potassium solubilisers and mycorrhizae, as well as well as microbial consortia.

Frass is another growing category of biofertilizer, and an area where a lot of product development is taking place. Frass is excrement from the digestive system of various pests. It is a microbial inoculant, and in particular a soil inoculant, a source of desirable microbes that promote the formation of compost. Therefore, one of the uses of frass can be defined as a biofertilizer.

Biofertilizers market sizing and growth drivers

Estimates of the global market for biofertilizers varied considerably in the past, depending on the source. Eight different market studies estimated that global biofertilizers market sales varied between USD 668 million to USD 1.254 billion in 2016 and was expected to grow up to USD 4 billion on the higher end in 2025. However, more recent estimates are showing less spread and tend to look more like a consensus is closer to being established. The general consensus is now that the biofertilizers market is expected to grow with a CAGR of between 10 % and 12 % from 2019 to 2027.

The reasons for the increasing interest in the biofertilizers sector are numerous. Environmental concerns about protecting soil fertility and minimizing adverse effects on the environment, coupled with growing consumers demand for better quality residue free food, influence the rise of demand for biofertilizers. Additionally, scientific advances leading to the development of more-effective products, and new companies entering, influences the market. Finally, the recent legislative developments are boosting grower confidence in products.

While the biofertilizers market is expected to grow, some factors are impacting sales. The poor reputation of biofertilizers still lingers, and convincing evidence is sometimes lacking. As the sector is comparatively new, many growers and advisers lack knowledge. In addition, fluctuating commodity prices mean that when prices are low, growers may be less keen to invest in a new input. Additionally, lower versatility, restricted shelf life and high production costs of biofertilizers, and the need to change existing processes on the farm to integrate biofertilizers application can hinder the further development of the market.

Regional differences

There are regional differences in biofertilizers adoption rates, which are caused by local regulation and government initiatives to establish more sustainable farming practices, rate of awareness of biofertilizer technology, access to quality biofertilizer products and use of traditional agricultural methods in the current farming system. North America was the largest market in 2019, accounting for 32.6% of global biofertilizer sales. Growth of the biofertilizers market in the region is driven by Canada and the U.S.

Europe is the second-largest consumer of biofertilizers and held a 30% share of the global biofertilizer market in 2019. Growing preference towards organic food coupled with rising awareness regarding hazards associated with chemical fertilizers and atmospheric pollution has resulted in high consumption of biofertilizers in this region. Together North America and Europe accounted for over 50% of the global biofertilizer products revenue. A favourable regulatory scenario, especially in North America and Europe is expected to be a key driving factor for demand growth over the next few years.

Asia Pacific was the third larger consumer of biofertilizers and accounted for over 15% of global revenue share in 2019. The application of biofertilizers in India is growing significantly with many regional producers catering to very small farmers. The government has initiated and subsidizes several programmes, especially those dealing with organic agriculture. The Chinese government encourages the use of biofertilizers and admits the need to improve technology, quality and product marketing.

Africa is still developing the inoculant market but is hampered by lack of farmer knowledge, poor logistics and distribution.

In terms of the global sales by product segments, there is a consensus that nitrogen-fixing bacteria NFB (Rhizobium, Azotobacter, Azospirillum, Acetobacter) represent around 75-80% of revenue globally. Phosphate-solubilizing microorganisms PSM represent 15% of global sales, whereas Potassium-solubilizing microorganisms KSM represent 5-7%.

Research and Development

It takes only around two to five years to bring a new biofertilizer product to market. For products which efficiency depends on many factors, many field trials may be necessary. Companies selling biofertilizers have often been too small to fund this level of research. In addition, the historical lack of legislation has meant that many biofertilizers were able to be sold without the backing of scientific data.

In recent years, a more scientific approach to developing biofertilizers has evolved. This has raised the possibility of creating patentable elements, thus making the sector more attractive to investors. R&D is indispensable for bringing more products onto the market and improving efficiency. Areas being studied include: biofertilizer use in non-legume crops, better Bradyrhizobium strains, application of mycorrhiza, co-inoculation and pre-inoculated seeds, and microbiome research. Through microbiome research scientists are today trying to understand the benefits of fungal, bacterial, and eukaryotic symbionts.

The biostimulants and biofertilizers sector, with its potential for growth and innovation, has encouraged venture capitalists to invest. This inflow of money has allowed start-ups to attract scientific talent from existing successful agribusinesses and academic institutions. Notable startup companies include Indigo Agriculture, Concentric, NewLeaf Symbiotic and Pivot Bio.

Formulations and Applications

Correct formulation of biofertilizers is important to ensure an effective product that is easy to use. Laboratory isolation and screening based on plant growth-promoting traits of new microbial strains are followed by in vitro, greenhouse and/or field experiments, including a range of crops to evaluate the microbial effectiveness and persistence in the soil. This is necessary because even if interesting laboratory evidence is obtained, this does not always result in plant growth promotion under field conditions.

The biofertilizer formulations can be liquid, freeze-dried powder and carrier-based formulations. Different formulations have their advantages and disadvantages. Carrier based formulations are cheaper and easier to produce, while they are contamination prone and have a limited shelf life. Liquid formulations have longer shelf life - 2 to 3 years, are more effective and contamination free, but cost more. In terms of value, the liquid biofertilizers segment was estimated to dominate the global market in 2020.

Quality of biofertilizers has to be controlled at various stages of production: during mother culture stage, carrier selection, broth culture stage, mixing of broth and culture, packing and storage. The following factors - Edaphic, Climate and Biotic, can influence the efficacy of the biofertilizers application. The assurance of efficacy for a biofertilizer in a particular soil with a specific variety of crop is thus a complex task.

Company profiles and product lines

The inoculant market in Europe and the Americas is dominated by the large multinational companies, Novozymes and BASF, although smaller multinationals are active and there are many regional companies.

In the Indian subcontinent and China there are many small and medium local companies whereas Africa has relatively few active companies. Details on the contents of the products sold in these countries are often limited or unavailable.

About the Author

Marina Altman is a business intelligence specialist and writer. She graduated from ETH Zürich with a Master's Degree in Management, Technology and Economics and wrote her Master Thesis on the "Future potential of grain production in Russia". She worked for several years at Syngenta's Business Intelligence Department and later as a freelance author of agricultural reports and competitive analysis. Marina is also the author of Crop Science Biostimulants 2020.

Please contact alan.bullion@ihsmarkit.com for any further information on the new Crop Science Biofertilizers 2021 report.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.