What is in this article?:
- Fertilizer markets for the main nutrients – nitrogen (N), phosphorus (P) and potassium (K) – have fully recovered from the downturn in 2008/09.
- This improved environment provides a strong basis for long-term investment in additional capacity in order to respond to rising demand in the agricultural sector.
Over the next five years, global capacity will further increase with close to 250 capacity-related projects and a large number of expansions at existing sites. IFA estimates that about $88 billion will be invested by the fertilizer industry between 2010 and 2015. On average, the global potential supply of mainstream fertilizers is seen as growing by 30 percent by 2015.
Three important factors are driving this surge in investment: the willingness of fertilizer companies to increase local transformation of raw materials; pressures from governments to reduce their respective import reliance on fertilizers supply (for instance, in Brazil, China, India, Pakistan and Vietnam); and the industry’s responsibility to prepare for the future and provide adequate plant nutrients to increase productivity sustainably.
The report also highlights the emergence of new suppliers and exporters, such as Saudi Arabia in the case of DAP and Algeria in that of urea and ammonia. For the first time in IFA’s forecasts, China’s fertilizer production and consumption is seen as slowing down. This represents a turning point for the Chinese industry, which is more used to overcapacity scenarios. It clearly testifies to the maturity of its market.
For more information on production, trade and sales conditions in 2011 and prospects for 2015, please consult IFA’s Market Outlook Summary.