What is in this article?:
- Firm demand, project delays keeping fertilizer markets tight
- Expansion in Latin America
• This report shows that demand for fertilizer is steadily increasing in response to supportive agricultural market fundamentals, while expansion of supply is still delayed because of schedule slippages for about half of projects.
Expansion in Latin America
Latin America is seen as reinforcing its position as an engine of future expansion.
Demand is anticipated to rise firmly in Eastern Europe and Central Asia, as well as in Africa. In volume terms, East Asia, South Asia and Latin America together would account for three-quarters of the increase in world demand during the next five years.
The outlook for world fertilizer demand remains subject to major uncertainties, especially the evolution of the world economy.
On the supply side, global total nutrient sales for all uses reached 221 Mt nutrients in 2011, increasing 4 percent compared with 2010, due to firm demand in the fertilizer sector and a gradual recovery in the industrial segments.
World total nutrient sales in the fertilizer and industrial sectors in 2016 are forecast to grow at an average annual rate of 1.8 percent, to 245 Mt nutrients in 2016.
“The fertilizer sector will soon reap the benefit of massive investments in new capacity,” states Michel Prud’homme, Director of IFA’s Production and International Trade Service. Close to 250 new fertilizer plants are projected to come on stream over the next five years, corresponding to a total investment in excess of US$90 billion.
owever, about half these projects have faced delays of 6 to 18 months. Schedule slippages have slowed down the projected growth of capacity and have led to more balanced market conditions in the short-term, while lowering the levels of potential surpluses in the near term.
Global nitrogen capacity is projected to expand 17-25 percent compared with 2011, leading to large potential surpluses by 2015.
Phosphoric acid and phosphate fertilizer capacity would expand by 20 percent, but global phosphate demand is projected to grow at similar rates, thus absorbing most of the projected incremental supply.
In the potash segment, world capacity may increase by 42 percent while demand expands by 14 percent. However, most potash projects suffer from delays, slowing down the emergence of massive surpluses in the short- to the medium-term.
In the near-term, trade prospects appear strong for most products. Between 2011 and 2016, global trade would expand by 15-20 percent for seaborne ammonia, potash and processed phosphates.
Sulphur trade may increase 20-25 percent, due to strong demand projected in the fertilizer sector and in ore leaching operations. Urea exports may grow by an overall 15-30 percent, depending on India’s import demand and capacity developments.
For more information on production, trade and sales conditions in 2012 and prospects for 2016, please consult IFA’s Market Outlook Summary: http://www.fertilizer.org/ifa/HomePage/FERTILIZERS-THE-INDUSTRY/Market-outlooks.html. For more information on the proceedings from IFA’s 80th Annual Conference: http://www.fertilizer.org/ifa/HomePage/LIBRARY/Conference-papers/Annual-Conferences/2012-IFA- Annual-Conference.