Phosphoric Acid Market Trends Indicate Shift Toward Sustainable Production

The global phosphoric acid market was valued at USD 41.26 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 4.2% between 2023 and 2040. A major driver of this growth is its extensive application in producing phosphate fertilizers, particularly Mono-Ammonium Phosphate (MAP) and Diammonium Phosphate (DAP). Phosphoric acid ranks as the second most widely consumed inorganic acid worldwide, following sulfuric acid. It is manufactured industrially in three distinct grades based on concentration and end-use: food grade, agriculture grade, and industrial grade. Of these, the agriculture grade dominates the global market in both value and volume, due to its prevalent use in fertilizer production.

In North America, the United States stands out with a strong agrochemical sector. It hosts several major fertilizer manufacturers such as BASF SE, Fertilizer Canada, Yara, among others. Agriculture plays a significant role in the country’s economy, with farming activities present in every state—from small farms to large-scale commercial operations. A growing focus on maize cultivation is expected to increase the demand for phosphatic fertilizers, thereby driving phosphoric acid consumption.

In China, rapid growth in agricultural production, combined with the country’s economic development, has led to a surge in demand for phosphate fertilizers. As a result, both the production and consumption of phosphoric acid have increased. Nonetheless, strict regulatory measures are projected to moderate production growth over the forecast period. In contrast, India is expected to witness robust growth in phosphoric acid usage, supported by a rise in agricultural activity and fertilizer exports, which are likely to boost both domestic production and consumption.

Application Insights
Diammonium Hydrogenphosphate (DAP) held the largest market share in 2022, accounting for over 33.0% of global revenue. This is largely due to the rising demand for DAP fertilizers across the agricultural sector. China is currently the largest producer, followed by the United States, Russia, Brazil, and Morocco. DAP is favored for its high nutrient content, making it a preferred choice among farmers. On average, producing one ton of DAP requires 0.4 tons of sulfur to process 1.5 to 2 tons of phosphate rock and approximately 0.2 tons of ammonia.

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Regional Insights
The Asia Pacific region led the global market in 2022 with a 49.5% revenue share. It is expected to maintain this leading position during the forecast period, largely due to China’s significant phosphate rock reserves and high output of phosphate fertilizers and yellow phosphorus. However, demand in China has recently declined as a result of tighter regulations governing the use of phosphate-based fertilizers.

Key Market Players
Some of the leading companies in the global phosphoric acid market include: