Fertiliser consumption down

A fertiliser surplus is expected in the next few years, after global fertiliser consumption declined 5% in 2008/09 as a result of the economic downturn. So said Patrick Heffer, executive secretary of the International Fertiliser Industry Association’s (IFA) agriculture committee at the Fertiliser Society of South Africa’s annual congress in Durban on 12 June.
The decline from 168 million tons in 2007/08 to 159,6 million tons is expected to depress fertiliser consumption in the next year or two.
Over the same period, nitrogen use declined by 1,6%, phosphorus by 7,3% and potassium by 14,4%. A partial recovery is forecast in 2009/10 of 3,6% to 165,4 million tons. This is expected to be made up of 6% phosphorus, 4% potassium and 2,6% nitrogen, but will still be 3 million tons below the 2007/08 consumption.
“We forecast it’ll be another six months before sales recover from the downturn, but a strong recovery is expected in the next five years to reach 187 million tons globally by 2013/14,” he said.
This is an increase from the average of 163 million tons in the 2006/07 and 2008/09 periods and is made up of an increase in nitrogen from 99 million tons to 111 million tons, phosphorus from 37 million tons to 44 million tons and potassium from 26,5 million tons to 31,4 million tons.
Heffer said many factors impacted on the fertiliser’s global demand, supply and trade, most obviously the oil price, demand for cereals, shipping costs, price and availability of raw materials and the evolution of the biofuel industry.
FSSA director Dr Gert van der Linde said fertiliser prices had decreased globally to pre-2007 levels when the price climb started.
“There’s some relief for farmers with the lower prices, which are in the region of 75% lower than six months ago. The only exception is potassium, the price of which is still very high because there’s a shortage. But prices have hit rock bottom. Urea, for example, has sunk below production costs so the plants are starting to close down.”
Lower shipping costs have also helped lower prices of imported fertiliser. “At the height of the economic boom in 2008, it cost US5 000 (over R1 816 million) a day for a ship. It’s now US 000 (R80 671) a day.”
Van der Linde said when the financial system picked up again, fertiliser prices might also pick up. “No one knows when prices might go up,” he said. “But the global population is increasing at 200 000 people per day – an extra 70 million people a year who must all be fed.” – Robyn Joubert