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1/24/2011
1
Michel Prud’homme and Patrick Heffer
IFA Secretariat
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Global Outlook for World Fertilizer Demand,
Supply and Supply/Demand Balances
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Content
Global Agricultural Situation
Fertilizer Demand Outlook
Global Supply Trends
Nitrogen Capacity Evolution
Global Supply-Demand Balances
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Global Agricultural Situation
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
World Cereal Production and Utilization
Source: FAO
Million tonnes
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
World Cereal and Oilseed Production
WheatCoarse
Grains
Rice
(milled)Oilseeds Total
2007 611 1 077 433 392 2 513
2008 683 1 110 448 396 2 637
2009 (e) 683 1 109 441 441 2 674
Change -0.1% -0.1% -1.6% +11.3% +1.4%
2010 (f) 643 1 085 451 441 2 620
Change -5.8% -2.1% +2.4% -0.1% -2.0%
Source: USDA
Million tonnes
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Source: Financial Times
Int’l Wheat Prices (US cents/bu)
Drought in the CIS
+50%
Russia
• Wheat output: -31%
• Coarse grain output: -46%
• Grain export ban until June
• Grain exports down from 22 to 4 Mt
Ukraine
• Wheat output: -19%
• Coarse grain output: -10%
• Grain export quotas until December (June?)
• Grain exports down from 21 to 12 Mt
Source: USDA + IGC
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Smaller Than Expected US Maize Harvest
Source: IGC
US Maize Yield Forecasts and Crop Ratings
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
World Cereal Stock-to-Use Ratio
Source: FAO
Ending stock reduction in
2010/11
World:
• -12% for wheat
• -10% for coarse grains
Major exporters:
• -16% for wheat
• -41% for coarse grains
Source: USDA
1/24/2011
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Fertilizer prices: N. Africa DAP; Yuzhnyy prilled urea; Vancouver (std) Potash
Sources: British Sulphur, Financial Times and IMF
Fertilizer Prices Relative to
Agricultural Commodity Prices
Ratio based on international prices.
It can be quite different at the local level
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Fertilizer Demand Outlook
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
0
20
40
60
80
100
120
140
160
180K2O
P2O5
N
2007/
08
2008/
09
2009/
10 (e)Change
2010/
11 (f) Change
2011/
12 (f) Change
N 100.5 98.5 102.6 +4.1% 104.2 +1.6% 106.9 +2.6%
P2O
538.4 33.6 37.5 +11.5% 39.8 +6.0% 41.7 +4.7%
K2O 28.9 23.5 23.5 +0.3% 27.4 +16.3% 29.3 +7.2%
Total167.
9
155.
6
163.
6+5.2% 171.3 +4.7% 177.9 +3.8%
Global Fertilizer Demand Short-Term Prospects
Mt nutrients
Source: IFA, December 2010
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Projected Evolution of Regional
N Fertilizer Demand (Mt N)
Source: IFA, December 2010
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Projected Evolution of Regional
P Fertilizer Demand (Mt P2O5)
Source: IFA, December
2010
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Projected Evolution of Regional
K Fertilizer Demand (Mt K2O)
Source: IFA, December 2010
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Some of the Main Uncertainties
Evolution of agricultural commodity prices
risk of a new bubble
Evolution of fertilizer prices relative to crop prices
Evolution of the world economic context
including oil price, currency exchange rates
New policies aimed at increasing nutrient use
efficiency and recycling organic nutrient sources
weather conditions
Source: IFA, December 2010
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
0
20
40
60
80
100
120
140
160
180
200
K2O P2O5 NAv. 2007/08
to 2009/10
(f)
2014/15
(f) Change
N 100.9 112.8 +1.9 % p.a.
P2O
536.7 45.1 +3.5 % p.a.
K2O 25.3 32.6 +4.5 % p.a.
Total 162.9 190.5+2.7 %
p.a.
Global Fertilizer Demand Medium-term Outlook
Base year
Mt nutrients
Source: IFA, June and December 2010
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Regional N Fertilizer Demand
Medium-term Outlook (Mt N)
Source: IFA, June and December 2010
0 5 10 15 20 25 30 35 40 45
West Asia
EECA
Latin America
W+C Europe
North America
South Asia
East Asia
avg 2007/06-2009/10
Variations to 2014/15
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Global Supply Trends
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
World Nutrient Supply Trends
170
180
190
200
210
220
230
2002 2003 2004 2005 2006 2007 2008 2009 2010
Consumption
Global NPK sales
NPK Production
212
194
215
Mt nutrients
215
201
204
Source: IFA, December 2010
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
-
20
40
60
80
100
120
140
160
180
200
220
2005 2006 2007 2008 2009 2010
Industrial
Other
World Nutrient Uses
Mt nutrients
Fertilizer
Nutrient uses as fertilizers, rose
6% and accounted for 80% of
total uses.
2010 fertilizer consumption :
record level.
Industrial uses and other rose
11%, but still 2% short of record
level of 2007.
Source: IFA, December 2010
1/24/2011
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Nitrogen Capacity Evolution
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
-2
0
2
4
6
2007 2008 2009 2010 2011
Others Coal China
Ammonia Feedstock Trends and Yearly Changes
Mt N
Source: IFA, December 2010
-
50
100
150
200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Other Coal Natural Gas
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
US$/MMBtu
0,00
2,00
4,00
6,00
8,00
10,00
12,00
14,00
2005/06 2007 2008 2009 2010 2011
Russia
Ukraine
China
USA
Europe
Azotecon, US EIA, Endex, FirstEnergy, IFA members in Russia, Ukraine, China
Natural Gas Prices - Short Term Trends
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Ammonia Producing Countries : Future Capacity
-
20
40
60
80
2010 2015
Source: IFA, December 2010
159 Mt in 2010
to 188 Mt in 2015
+3.5% per annum
Mt N
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
-
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
1990 1992 1994 1996 1998 2000 2002 2004
Mt N
AS
Calc.amm.
Dir Amm
N Sol
MAP/DAP
AN
ABC
N P K
Urea
Nitrogen Fertilizer Consumption
Source: IFA
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
2,3
3,53,9
5,04,2
3,4
6,01,2
1,3
1,4
0,71,6
2,5
1,0
0
1
2
3
4
5
6
7
8
2008 2009 2010 2011 2012 2013 2014
Other
Urea
World Nitrogen Capacity : Annual Developments
Mt N
Source: IFA, December 2010
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Urea Capacity : Potential Supply Developments
0
10
20
30
40
50
2010 2015
Source: IFA, December 2010
Mt N
83 Mt N in 2010
to 105 Mt N in 2015
+5.4% per annum
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Global Supply – Demand Balances
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
142 146
153 157
164
139 142
147 149
155
120
130
140
150
160
170
2007 2008 2009 2010 2011
130 130 133 135
139
127 125 125 130
134
120
130
140
150
160
170
2007 2008 2009 2010 2011
Global Supply - Demand Balances : 2007 to 2011
Mt nitrogen N
Mt urea
Source: IFA, December 2010
Supply Demand
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
142
195
139
176
0
50
100
150
200
2007 2008 2009 2010 2011 2012 2013 2014
130
157
125143
0
50
100
150
200
2007 2008 2009 2010 2011 2012 2013 2014
Supply Demand
Global Nitrogen Balances : 2007 to 2014
Mt nitrogen N
Mt urea
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
- 2 4 6 8
WEST EUROPE
CENTRAL EUROPE
EECA
NORTH AMERICA
LATIN AMERICA
AFRICA
WEST ASIA
SOUTH ASIA
EAST ASIA
OCEANIA
Fertilizers +14 Mt Industrial +6 Mt
Regional Nitrogen Demand Growth
AMMONIA Mt N
Source: IFA, December 2010
UREA Mt N
0 1 2 3 4 5 6 7
WE
CE
EECA
NA
LA
AF
WA
SA
EA
OC
Fertilizers +12 Mt
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
38 38 39 40 41
37
33 35 37 39
-
10
20
30
40
50
2007 2008 2009 2010 2011
Mt phosphoric acid P2O5
35 36 37 38 39
33 28 25
30 33
-
10
20
30
40
50
2007 2008 2009 2010 2011
Mt potash K2O
Global Supply - Demand Balances : 2007 to 2011
Source: IFA, December 2010
Supply Demand
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5th International Nitrogen Conference – New Delhi, India – 6 December 2010
170
180
190
200
210
220
230 Global consumption
Sales, historic and potential
NPK Production
World Nutrient Supply Trends : 2002 to 2011e
Mt nutrients
224
222
1. Robust demand for all nutrients
worldwide, but with inherent high
volatility.
2. Firm growth in industrial sectors.
3. Adequate capacity and effective
capacity.
4. New capacity emerging outside China.
5. Potential tightness in supply during the
first half of 2011, due to the timing of
start-up, ramp-up on new capacity and
trade measures.
6. Rising trend of feedstock costs.
7. Uncertainties on China
Source: IFA, December 2010
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Thank you for your
attention
www.fertilizer.org
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