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Steering The Fertilizer Industry
Through Challenging Times
Dr. Abdulrahman Jawahery
IFA Chairman & President, GPIC
Keynote Address – GPCA Fertilizer Convention, 6-8 September, Dubai
THREE CHALLENGES … AND OPPORTUNITIES!
Less than ideal market conditions and a
possibly persistent oversupply of
nutrients,
increasing concerns and pressures with
regard to nutrient losses to the
environment, and
the misuse of fertilizers for
criminal/terrorist activity.
1
2
3
CROP PRICES REMAIN LOW…
Source: World Bank (April 2016)
Relative price stability
since mid-2015
Prices will likely remain
low in 2016/17
Low returns from previous
crop
Commercial farmers tend
to reduce and optimize
fertilizer application rates
GLOBAL FERTILIZER DEMAND
TO ALMOST REACH 200MT BY 2020/21
0
40
80
120
160
200
K20P205N
Medium-term Forecast (Mt nutrients)
Source: IFA Agriculture
BASE YEAR
Average Annual
Change (% p.a.)
Base Year
2020/21
N +1.2
P2O5 +1.7
K2O +2.3
Total +1.6
199
37
45
117
AGGREGATE REGIONAL FERTILIZER DEMAND
Source: IFA Agriculture
0 10 20 30 40 50 60 70 80
Oceania
West Asia
Africa
E. Eur. & C. Asia
W. & C. Europe
Lat. Am. & Carib.
North America
South Asia
East Asia
Av. 2013/14 to 2015/16
Variation in 2020/21
Medium-term Outlook (Mt nutrients)
Top-3 = 77%22%
33%
22%
GLOBAL UREA SUPPLY DEVELOPMENTS 2015-2020
- 20 40 60 80 100
East Asia
Africa
North America
South Asia
EECA
Other
2015 to 2020
-
50
100
150
200
250
2015 2016 2017 2018 2019 2020
Mt urea
NET UREA SUPPLY GROWTH IN KEY REGIONS GLOBAL UREA SUPPLY/DEMAND OUTLOOK
Source: IFA Production & International Trade 2016
Supply
Demand
Balance
Mt urea
-
10
20
30
40
50
60
2015 2016 2017 2018 2019 2020
GLOBAL PHOSACID SUPPLY DEVELOPMENTS 2015-2020
Mt P2O5
NET P ACID SUPPLY GROWTH IN KEY REGIONS GLOBAL P ACID SUPPLY/DEMAND OUTLOOK
Source: IFA Production & International Trade 2016
Supply
Demand
Balance
Mt P2O5
0 10 20 30
Africa
East Asia
West Asia
Others
2015 to 2020
-
10
20
30
40
50
60
70
80
90
2015 2016 2017 2018 2019 2020
GLOBAL POTASH SUPPLY DEVELOPMENTS 2015-2020
Mt MOP
NET P ACID SUPPLY GROWTH IN KEY REGIONS GLOBAL P ACID SUPPLY/DEMAND OUTLOOK
Source: IFA Production & International Trade 2016
Supply
Demand
Balance
Mt MOP
0 10 20 30
EECA
NorthAmerica
East Asia
Others
2015 to 2020
LOW FERTILIZER CONSUMPTION
LARGER YIELD GAPS
Achieving the Abuja
Target of 50 kg
nutrients/ha would
require quadrupling
current consumption
levels in SSA, from 3.4
Mt in 2014 to some 14
Mt, i.e. a 10 Mt increase
(~6% of current world
consumption)
Source: IFA , FAO
THE NEED TO FOCUS ON AFRICA
RELATIVE CONSUMPTION OF N, P2O5 AND K2O
IN INDIA AND IN THE REST OF THE WORLD (ROW)
0%
20%
40%
60%
80%
100%
INDIA ROW
N P2O5 K2O
BENEFITS/DRAWBACKS OF EEF
SRF/CRF/SF
Benefits of EEF
o Savings in labour, energy and time
o Reduce nutrient losses (leaching,
runoff, volatilization, nitrification)
Main drawback
o Higher price against conventional
fertilizers
Market size in 2014
o Estimated at 12-13 Mt products
o Growth potential between 2014
and 2019: close to 7% per annum
o SR/CR urea represents a very
small fraction of world’s fertilizer
urea use
China22%
India50%
North America
10%
Latin America
8%
Europe6%
Other 4%
Note: India’s EEF market is made
exclusively of neem-coated urea
Source: IHS 2015
GLOBAL DISTRIBUTION OF EEC
CONSUMPTION IN 2014
THE « WAGES » OF TOO MUCH NITROGEN
Water quality
Air quality
Greenhouse balance
Ecosystems
Soil quality
Source: European Nitrogen Assessment, 2011
TYPICAL EVOLUTION OF NITROGEN USE EFFICIENCY
(NUE) OVER TIME
N Market Share in 2015/16
Deved countries 26%
China 29%
India 14%
Brazil 7%
SSA 2%
ROW 22%
N INPUTS
Fertilizer-N
+ Manure-N recycled
+ Crop BNF
+ Atmospheric deposition
+ (irrigation, biosolids…)
Different countries are on
different points on the curve
Sub-Saharan Africa
Brazil
Developed Countries
ChinaIndia
100%
Crop yield
NU
E
NUE =N output
Sum of N inputs
N SOURCE AND
NH3 LOSS.
LAB INCUBATION
Source: Dr. W. Thornberry, Sturgis, KY; Dr. S. Edelhar, University of Illinois
REDUCED N
LOSSES WITH CRFS
OPPORTUNITIES IN CHALLENGING
UREA MARKET CONTEXT
EEF products perform well, but lack market scale and
large plant capacity
Only 5% of the world nitrogen currently converted to
EEF (2014)
Nitrogen efficiency technology what it does:
o adds differentiation
o generates performance
o brings value
Trends creating strong demand for EEF
Rising regulations and restrictions on fertilizer use
o But also EEFs, recently (eg draft EU regulation)
Urea capacity growth exceeding demand growth,
putting pressure on urea margins
o Producers looking towards added-value markets
With a 63% share of all N fertilizer consumption (2013), urea offer the greatest opportunity for innovating
nitrogen fertilizers in terms of NUE gains and volumetric sales
Source: adapted from Koch Agronomics 2015; IFA PIT Committee 2016
-
5
10
15
20
25
30
35
2015 2016 2017 2018 2019 2020
Supply Demand
Global urea supply & demand
cumulative growth
POTENTIALSURPLUS
LIMITING THE MISUSE OF NITROGENOUS FERTILIZERS:
PROTECT & SUSTAIN CERTIFICATION
BUSINESS BENEFITS include:
Safe working conditions
Protected environment
Safe communities
Good reputation
More profitability
Less risk for everyone
Protect & Sustain was developed by IFA members with independent auditors for IFA
members. It has become the de facto global product stewardship standard for
fertilizers.
Protect & Sustain includes all relevant elements of ISO and OHSAS certifications
which gives many companies a quick start. A major difference vis-à-vis Responsible
Care is that Protect & Sustain includes 20 product security-specific questions.
LIMITING THE MISUSE OF NITROGENOUS FERTILIZERS:
PROTECT & SUSTAIN HALL OF FAME
Countries: Austria, Argentina, Bahrain, Belgium, Brazil, Cameroun, Canada, Chile, China, Czech Republic, Croatia, Egypt,France, Finland, Germany, Ghana, Greece, Hungary, India, Israel, Italy, Kenia, Korea, Lithuania, Netherlands, Norway,Malaysia, Mexico, Morocco, Pakistan, Poland, Portugal, Romania, Qatar, South Africa, Spain, Sweden, Thailand, Trinidad &Tobago, UAE, UK, USA, Vietnam.
Now available for non-producers, as well.
33 CERTIFIED FERTILIZER PRODUCERS (N, P, K) IN 44 COUNTRIES
August 2016
“Safety, Health,
Environment (SHE)
Excellence: A
Foundation for
Fertilizer
Production 2.0”
ATTENDANCE: 100 delegates from 40 countries …
we hope to see your teams there, too!!!
