IFA - Global Outlook for World Fertilizer Demand, Supply and SupplyDemand Balances (Apresentação)

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


Content

Global Agricultural Situation

Fertilizer Demand Outlook

Global Supply Trends

Nitrogen Capacity Evolution

Global Supply-Demand Balances

1/24/2011

2


Global Agricultural Situation


World Cereal Production and Utilization

Source: FAO

Million tonnes

1/24/2011

3


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


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

1/24/2011

4


Smaller Than Expected US Maize Harvest

Source: IGC

US Maize Yield Forecasts and Crop Ratings


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

5


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


Fertilizer Demand Outlook

1/24/2011

6


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


Projected Evolution of Regional

N Fertilizer Demand (Mt N)


1/24/2011

7



P Fertilizer Demand (Mt P2O5)

Source: IFA, December

2010



K Fertilizer Demand (Mt K2O)


1/24/2011

8


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



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

1/24/2011

9


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


Global Supply Trends

1/24/2011

10


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



-

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.


1/24/2011

11


Nitrogen Capacity Evolution


-2

0

2

4

6

2007 2008 2009 2010 2011

Others Coal China

Ammonia Feedstock Trends and Yearly Changes

Mt N


-

50

100

150

200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Other Coal Natural Gas

1/24/2011

12


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


Ammonia Producing Countries : Future Capacity

-

20

40

60

80

2010 2015


159 Mt in 2010

to 188 Mt in 2015

+3.5% per annum

Mt N

1/24/2011

13


-

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


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


1/24/2011

14


Urea Capacity : Potential Supply Developments

0

10

20

30

40

50

2010 2015


Mt N

83 Mt N in 2010

to 105 Mt N in 2015

+5.4% per annum


Global Supply – Demand Balances

1/24/2011

15


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


Supply Demand


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

1/24/2011

16


- 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


UREA Mt N

0 1 2 3 4 5 6 7

WE

CE

EECA

NA

LA

AF

WA

SA

EA

OC

Fertilizers +12 Mt


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


Supply Demand

1/24/2011

17


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



Thank you for your

attention

www.fertilizer.org

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IFA - Global Outlook for World Fertilizer Demand, Supply and SupplyDemand Balances (Apresentação)

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