identifying and examining the current challenges and opportunities faced by the fertilizer industry

14/12/2010

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Identifying and examining the current challenges and opportunities faced by the fertilizer industry

Luc M. Maene, Director General, IFA

The challenges

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Identifying and examining the current challenges and opportunities

faced by the fertilizer industry

Growing demands on agriculture

Clothing a growing population

Fibres for construction, medicine and other non-clothing purposes

Production of chemicals and other industrial inputs

Crop-grown pharmaceuticals

Fibre and Other Components

Feeding a growing population

Ensuring minimal caloric intake

Growing preferences for meat

Diversifying diets to ensure balanced nutrition

Food

More people require more livestock

Meat consumption per person is rising

Feed

Concerns over the longevity of fossil fuel reserves

Security and dependence issues

Increasing energy demands per person

Reducing pollution from current fuels

Bioenergy

Food and nutrition security

Climate change

Conserving b

iodiversity

Envi

ronm

ent



A moving target

• Growing scarcity, changing distribution, contamination, salinization…

• New cropping patterns, declining soil pools of nutrients, new recycling loops in nutrient cycles…

• Changing weather patterns (climate change), soil degradation, rural depopulation…

• Urbanization (often on fertile land), deforestation, reforestation, wetlands disappearing…

WATERMULTIPLYINGDEMANDS ONAGRICULTURE

CHANGINGCONDITIONS FOR

AGRICULTURELAND USE

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World population growth(billion people)

60

50

40

30

10

0

Developed countries

Developing countries

Source: UN

Source: FAO

Undernourishment in the

world (million people)



Limited immediate availabilityof additional arable land

Arable area

m2 per person

World population

in billion

| Source: Lammel (2007),

citing FAO: Towards 2015/30 (2002)

5,5

6

6,5

7

7,5

8

8,5

9

9,5

2000

2200

2400

2600

2800

3000

1996 2015 2030

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Yield gaps and relative land availabilityin different countries

| Source: World Bank Report, 2010



Changes in food consumption patternsdue to income growth

60

50

40

30

20

10

0

-10

| Adapted from OECD-FAO (2009)

OECD production non-OECD production

non-OECD consumptionOECD consumption World production

Wheat Coarse

grainsRice Oilseeds Oilmeals Vegetable

oils

Sugar

% change

2018

compared to

2006-2008

average

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Population trends and nitrogen useduring the 20th century

1900 1950

Wor

ld p

opul

atio

n (m

illio

ns)

| Adapted from Erisman, et al. 2008

2000

6000

4000

3000

2000

1000

0

5000 40

30

20

10

0

50

% W

orld population

Average

fertilizerinput (kg N

ha-1

yr -1)

Meatproduction (kg person

-1yr -1)

World population

Average fertilizer input

% world population

fed by Haber-Bosch nitrogenMeat production

World population

no Haber-Bosch nitrogen



Nitrogen use efficiency

6

17

41

78

118

125

125

130

151

178

243

Sub-Saharan Afr

Africa

South Africa

North Africa

WORLD

Central Europe

South Asia

Latin America

North America

West Europe

East Asia

Fertilizer consumption by region, 2007/08

(Kg/ha)

| Source: IFDC, Africa Fertilizer

CHINA - N use efficiency

(PFP: kg grain/kg N applied)

Nitrogen Partial Factor Productivity (PFPN)

for maize in the U.S.

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Renewable energy developmentWorld biofuel production

| Source: OECD-FAO

Billion litres

0

20

40

60

80

100

120

140

160 Ethanol production Biodiesel production



Areas of physical and economic water scarcity

• 1,000 litres of water are

needed to produce a kg

of maize

• 1,500 litres to produce a kg

of wheat

• 2,500 litres for a kg of rice

• 4,000 litres for a kg of poultry

• 15,000 litres for a kg of beef

• 3,000 litres per person to

produce our daily food intake

ON AVERAGE

| Source: IWMI

Little or no water scarcity

Approaching physical water scarcity

Physical water scarcity

Economic water scarcity

Not estimated

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The opportunities

and industry initiatives



Opportunities for the fertilizer industryand the farming sector

Improve the efficiency of fertilizer manufacturing plants

Develop new products of high performance

Increase irrigated conditions and water use efficiency

Increase cropping intensity and crop diversification

Improve the availability and affordability of fertilizers in Africa

Investment in agriculture must increase so it can play

its role as an engine of growth and poverty reduction

and act as a longer-term pillar to fight hunger!

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IFA initiatives

Africa forum

Farming First

Fertilizer use and human health

Effective last-mile delivery

Protect&sustainThe global fertilizer industry’s product

stewardship initiative

Task force on climate change

Water management initiative

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Fertilizer demand situation

and outlook



Global fertilizer consumption trends

| Source: IFA Agriculture

0

20

40

60

80

100

120

140

160

180

-20

-15

-10

-5

0

5

10

15

20

Consumption (Mt nutrients)

2000/01 to 2010/11 2000/01 to 2010/11

Year to year variation (%)P2O5N K2O

P2O5N K2O

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Total fertilizer use by cropat the global level in 2006/07 (%)

Other crops, 15

Oil palm, 1Soybean, 3

Sugar crops, 4

Cotton, 4

Other OS, 5

Other CG, 5

Fruits & veg.

Maize

Wheat

Rice

17

16

15

15




Total fertilizer use by cropfor the main countries in 2007/08


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Insights: evolution of fertilizer products

• Trend toward high-

analysis products

• Safety and security

concerns

• Displacement of ABC, AN,

FMP

• Growth for UAN, AS

• Demand recovery for SSP

• Further growth for NPKs

on account of balanced

fertilization and NBS-

scheme in India, among

others0%

10%

20%

30%

40%

50%

60%

70%

80%

MOP

Urea

AP

AN

ABC

Dir Am

NPK

Share of products by nutrient application


1987 to 2007



Anticipated impact of the driving forceson world fertilizer demand

N P2O5 K2O

Population growth

Food security

Food diversification

New land cultivation

Biofuels

Nutrient use efficiency

Nutrient recycling

Strongly influenced by technological developments and regulations

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Global P demandMedium-term outlook

Avg.

2007/08 to

2009/10

2014/15 (f)Change

(p.a.)

N 101.0 112.1 1.8%

P2O5 36.6 44.0 3.1%

K2O 25.0 32.2 4.3%

Total 162.7 188.3 2.5%

| Source: IFA



Regional fertilizer consumptionMedium-term outlook


0 10 20 30 40 50 60 70

Oceania

Africa

West Asia

E. Eur. & C. Asia

W. & C. Europe

Lat. Am. & Carib.

North America

South Asia

East Asia

Av. 2007/08 to 2009/10

Variation in 2014/15

Million tonnes nutrients

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Global nutrient supply/demand

balances

135 140 144 150 158

130 134 136 138 142

Mt N

Supply Demand

| Source: IFA PIT Committee

2010 2011 2012 2013 2014

40 42 43 45 47

38 39 41 42 44

Mt P2O5

38 39 41 4348

30 32 34 35 36

Mt K2O



Beyond the factory gate…

Greater investment in agriculture

More effective development aid

Reform in trade and domestic policies

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faced by the fertilizer industry| Source: Bationo,2009

A BETTER, MORE SECURE FUTURE…

…a new, efficient, dynamic and competitive agricultural sectorwill unlock hope for millions of children!

identifying and examining the current challenges and opportunities faced by the fertilizer industry

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