Malaysia Fertilizer Market Size & Summary (2025–2033)

According to Renub Research Malaysia fertilizer market is set for steady expansion over the coming decade, rising from US$ 901.26 million in 2024 to US$ 1,325.58 million by 2033, reflecting a CAGR of 4.38% from 2025 to 2033. Growth is predominantly fueled by the country's rising agricultural demand, government support for sustainable farming practices, and intensifying requirements for high-yield crop production. Malaysia's focus on technological innovations, including precision farming and eco-friendly fertilizer formulations, is further shaping the evolution of the industry.

Market Outlook

Fertilizers play an indispensable role in Malaysia’s agricultural sector, which remains a backbone of national food security and export revenue. Major industries such as palm oil, rice, rubber, and tropical fruit plantations rely heavily on fertilizers to sustain yield and soil health. With a mix of chemical, organic, and bio-based fertilizers available, farmers across Malaysia adopt different formulations based on soil type, crop needs, and sustainability goals.

The increased adoption of precision agriculture, including soil mapping and targeted nutrient application, has amplified the demand for high-quality fertilizers tailored to specific conditions. Malaysian farmers are also increasingly aware of environmental impacts, creating a gradual shift towards organic and bio-fertilizers, supported by government-led sustainability objectives.

Government incentives—particularly subsidies on essential fertilizers and programs encouraging balanced nutrient management—have consistently supported the sector. Malaysia's policies also encourage reduced dependence on chemical inputs, promoting innovation in green fertilizer alternatives.

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Key Growth Drivers

1. Rising Agricultural Output and High-Yield Crop Demand

Malaysia's agricultural landscape is expanding in response to population growth, dietary diversification, and increased demand for food and cash crops. The country's population grew from 33.4 million in 2023 to 34.1 million in 2024, intensifying food supply pressure. As a result, farmers increasingly rely on fertilizers to enhance soil fertility, increase production per hectare, and meet rising market needs.

Key crops—including palm oil, rice, and rubber—require consistent nutrient supply to maintain productivity. The uptake of modern agricultural practices, such as controlled-release fertilizers, precision irrigation, and soil nutrient diagnostics, also boosts fertilizer consumption.

Government subsidies significantly reduce the cost burden for farmers, encouraging higher fertilizer adoption rates across both smallholder and commercial agricultural operations.

2. Government Policies and Supportive Frameworks

Government intervention has been one of the strongest pillars supporting the Malaysian fertilizer market. Policies like the National Agro-Food Policy 2021–2030 (NAP 2.0) aim to create a resilient, advanced, and sustainable agro-food sector, placing strong emphasis on fertilizer efficiency, soil health, and productivity enhancement. The allocation of RM2.6 billion under the 2024 Budget to subsidize paddy farmers and fishermen underscores the commitment to keeping fertilizers affordable.

Malaysia's R&D focus on improved fertilizer formulations—including slow-release nitrogen fertilizers and microbe-enhanced bio-fertilizers—promotes sustainable nutrient management. Policy directives prioritizing food security, rice self-sufficiency, and ecological protection will continue to stimulate fertilizer demand in the coming years.

3. Expansion of Oil Palm Plantations

Malaysia remains among the world's leading producers of palm oil, and this sector is a major consumer of fertilizers. Oil palm trees require high nutrient input—particularly nitrogen (N), phosphorus (P), and potassium (K)—for optimal fresh fruit bunch production.

As Malaysia aims to maintain its global competitiveness in palm oil, plantations consistently invest in fertilizers to maximize output. The sector’s steady expansion and long-term profitability further enhance demand. Historical data shows a 12% increase in plantation area between 2005 and 2015, contributing to industry revenues of USD 16.1 billion in 2019.

Although the government has decided not to increase the biodiesel mandate from B10 to B20 due to infrastructure limitations, it continues to emphasize sustainable palm oil aligned with the UN Sustainable Development Goals—a move that further supports balanced fertilization and improved soil health.

Market Challenges

1. Volatility in Raw Material Prices

Malaysia is heavily dependent on imported fertilizer inputs such as phosphate, potash, and nitrogen compounds. Price fluctuations in the global commodity market—driven by geopolitical tensions, energy market instability, and supply chain disruptions—significantly affect production costs.

Higher fertilizer prices can reduce affordability for farmers, particularly smallholders. This, in turn, leads to decreased application rates, potentially affecting yields and long-term soil fertility. Import dependence also exposes the industry to foreign exchange fluctuations, adding financial strain.

2. Environmental and Regulatory Constraints

The excessive and inefficient application of chemical fertilizers can deteriorate soil structure, contaminate water bodies, and increase greenhouse gas emissions. In response, the Malaysian government has tightened regulations to promote environmentally responsible fertilizer use.

Regulations include:

·        guidelines on permissible nutrient application rates

·        stricter quality controls

·        promotion of organic and bio-based alternatives

Such regulations can increase compliance costs for fertilizer producers and distributors. Farmers must also adapt to new best practices, which may initially involve learning curves and additional resource requirements.

Market Insights by Key Segments

Malaysia Nitrogen Fertilizer Market

Nitrogen-based fertilizers are the most widely used category due to their critical role in stimulating vegetative growth. Key nitrogen fertilizers—urea, ammonium nitrate, and ammonium sulfate—are essential for rice, palm oil, and vegetable production.

Concerns over soil acidification, water pollution, and nitrogen losses have encouraged interest in controlled-release nitrogen fertilizers and more balanced nutrient strategies. Government-backed initiatives continue to promote sustainable nitrogen usage.

Ammonium Nitrate Fertilizer Market

Ammonium nitrate remains a vital nitrogen source, highly valued for its fast nutrient release properties. It is extensively used in oil palm cultivation. However, its classification as a potentially explosive substance has led to strict regulations on its storage, production, and transportation. Compliance with these safety standards influences market supply and pricing.

Ammonium Phosphate Fertilizer Market

Ammonium phosphate variants, including monoammonium phosphate (MAP) and diammonium phosphate (DAP), are important for promoting root development and overall plant vigor. These fertilizers are widely used in rice paddies and vegetable farming, where soil nutrients must be replenished regularly. Demand is rising alongside improved awareness of soil fertility and the increasing adoption of balanced fertilization regimes.

Organic Fertilizer Market

The organic fertilizer market is gaining momentum in Malaysia due to growing consumer awareness of sustainable and pesticide-free produce. Organic fertilizers support soil structure, microbial activity, and long-term soil fertility. Compost, manure, and microbial fertilizers are widely used, especially in horticulture and small-scale vegetable farming.

While demand is increasing, constraints such as higher prices and limited supply prevent widespread large-scale adoption.

Dry Fertilizer Market

Dry fertilizers remain the dominant form used in Malaysia, especially in large-scale operations like palm oil and rice farming. Granular and powder formulations offer easy storage, cost-effectiveness, and slow nutrient release. The dependency on rainfall for activation and the risk of uneven application are notable limitations. Nonetheless, demand remains steady due to widespread availability and affordability.

Agricultural Fertilizer Market

Fertilizers used in agriculture form the largest segment, supporting Malaysia’s crop productivity and export competitiveness. Government initiatives, technological advancements, and sustainability efforts shape demand across crop types. Challenges related to soil degradation, regulatory limitations, and cost pressures continue to influence market trends.

Vegetable Fertilizer Market

The production of Malaysia’s vegetables—including leafy greens, tomatoes, chilies, and root vegetables—heavily relies on nitrogen, phosphorus, and potassium fertilizers. Increasing consumer demand for fresh, organic produce has spurred the adoption of controlled-release and organic fertilizers. However, smallholder farmers often struggle with fertilizer cost fluctuations and require better training in efficient nutrient application.

Soybean Fertilizer Market

Soybean cultivation is still limited in Malaysia but growing due to demand for protein-rich foods and animal feed. Fertilizers enriched with phosphorus and potassium boost yields, while nitrogen-fixing bacteria reduce the need for synthetic nitrogen. Land scarcity and competition with imported soybeans constrain growth, but government support could stimulate local production.

Rice Fertilizer Market

Rice remains Malaysia’s most important staple crop. Fertilizers such as urea and ammonium sulfate are essential for achieving high yields in paddy fields. Subsidies play a crucial role in supporting smallholder rice farmers. However, excessive fertilizer use poses environmental risks, prompting efforts to promote precision nutrition and integrated nutrient management practices.

Market Segmentation Overview

By Type

·        Nitrogen Fertilizers

·        Phosphate Fertilizers

·        Potash Fertilizers

Nitrogen Fertilizer Subtypes

Ammonia, Ammonium Nitrate, Ammonium Phosphate, Ammonium Sulphate, Calcium Ammonium Nitrate, Potassium Nitrate, Urea, Urea Ammonium Nitrate, NK, NPK, NP, Others

By Category

·        Organic

·        Inorganic

By Form

·        Dry

·        Liquid

By Application

·        Agriculture

·        Horticulture

·        Gardening

·        Others

By Crop

Grassland, Vegetables, Fruits/Treenuts, Roots/Tubers, Sugar Crops, Fibre Crops, Oil Palm, Soybeans, Other Cereals, Maize, Rice, Wheat, Others

Key Companies Covered

·        Yara International ASA

·        K+S AG

·        CF Industries Holdings

·        Grupa Azoty S.A

·        ICL Group

·        OCI NV

·        Sociedad Química y Minera de Chile (SQM)

·        BASF SE

·        PhosAgro

Each company is evaluated across:

·        Company Overview

·        Recent Developments & Strategies

·        Product Portfolio

·        Financial Insights