Fertilizer

Industry
Overiew
Global &
Global &
Pakistan
 Global
Outlook
• Factors impacting agriculture and
fertilizer demand
– Oil price
– Weather
– Biotech Developments
– Agricultural Commodities
• Production, Stock and Prices
– Price and Other Factors
– Fertilizer use by Crops
• Supply/Demand situation
 References
• International
– International Fertilizer Industry Association IFA
– International Center of Agriculture for Dry Areas ICARDA
– Yara InternationalYara
– The FMB Group, UK FMB
– Fertecon Phosphate Report FERTECON
• Pakistan
– National Fertilizer Development Center NFDC
– Soil Fertility Institute Lahore Soil Fertility
– Fertilizer Industry of Pakistan Industry
– Average price from Commodity Markets Market Price
 Biotech
Developments
 Main breakthrough
Global GM Crops Area (Mha)  Sequencing of maize genome
 Main anticipated developments in
next five years
 Release of GM rice in China and
India
 Release of drought tolerant crops
 Status of N use efficiency trait?
Source: James
 Could be released by 2015
Mostly:
 USA, Argentina, Brazil, Canada, India,  Recent partnerships:
China - Monsanto/Evogene
 Soybean, maize, cotton, rapeseed - Pioneer/Arcadia
 Herbicide tolerance, insect resistance
GM Crops consume 50 – 100% more fertilizers IFA
World Cereal
Production

IFA
 World Cereal
Production

- 2.9%

+21% 391 Mt +1.5%

509 Mt 924 Mt
- 5.4%

136 Mt
+17% +37%

128 Mt 25 Mt

IFA
 World Cereal
Production

+13%

-4.8% 438 Mt +0.1%

478 Mt 932 Mt
+8.3%

147 Mt
+0.7% +78%

132 Mt 41 Mt

IFA
World Cereals Stocks

IFA
 Agri Commodity Price
Very high
Soya Wheat prices
Corn  Wheat

130%
 Soybean

87%
 Maize
31
%
 Rice
 Palm oil
 Milk
Price Increase Mar 07 – Mar 08

Declining but
still
high prices
Low but increasing  Sugar
prices
 Cotton
 Meat
IFA
World Fertilizer Use
(%)

IFA
Price Factors

Product Price

Commodity Price
Raw Material
Supply & Dist Cost
Supply Demand
 World Fertilizer
Consumption
45 Years Historical Trend
Million Tons

IFA
World Fertilizer
Consumption
Short Term

IFA
 World Fertilizer Outlook
Long Term

175 194

154

IFA
World Fertilizer
Demand

Two Third of the total increase is

expected to occur in East Asia,
South Asia together

IFA
 Global
Conclusion
• Fertilizer use continue to increase
+ Positive Factors
• Population pressure and Food needs
• Change in cropping system
• Increase in GM crops area
• Supporting Commodity prices
– Negative Factors
• Increasing prices – Oil, Raw material, Products
• Shortage of irrigation water availability
• Estimated growth pattern (CAGR)
– Nitrogen 2.8%, Phosphate 2.9%, Potash 2.4%
 Pakistan
• Land
– Geographical Area 79 million ha
– Area under cultivation 23 million ha (29%)
• Irrigation water availability (million acre feet)
– 1994 132
– 2004 136
– 2014 142 MAF (Dams : Satpara, Gomazam, 2 in Sindh)

• Population (million)
– 1994 132
– 2004 152 (2% CAGR)
– 2014 197 (3% CAGR)
 Pakistan
• Food security of increasing Population
– Horizontal expansion : Limited options
– Vertical growth : Unlimited options
• Farm land distribution
– Farm size breakup
– Farming efficiency and attributes
• Fertilizer use by crops
– Current crops and cropping system
– High yielding crops
– Genetically modified crops
 Pakistan
• Factors impacting agriculture
and fertilizer demand
– Weather
– Irrigation water availability
– Soil : Health and Reaction
– Agricultural Commodities
• Production, Stock and Prices
– Fertilizer use by Crops
– Bio-tech Development
– Fertilizer consumption pattern
• Supply/Demand situation
 Soil Health
250
Soil P & K depleted due to
lower use
Future crop yields depends
on balanced fertilizer input
215 Increased use of P & K is
critical

Soil Fertility Institute, Lahore

NFDC
Soil Reaction
0 7 14
Acidic Neutral Alkaline

Pakistani Soils
pH range
7.5 – 9.0

Mostly
8.0 – 8.5

Low availability
P, Fe, Mg,
Bo, Co, Zn
 Pakistan Commodity
Price
Mai
Market Price
Whe
ze
at
F

88%
C Rice Rice
S Flower

76%
Cotton

67%
55%
50%
34
%

Commodities price increase 2009 Vs 2008

Pakistan Fertilizer Use
(%)

Area
(%)

NFDC
Genetically Modified
Crops
Consume 50 -100 %
More fertilizers
Tons per Hectare
Source : NARC
2000
 Correlation
P Use and Wheat Production

NFDC
 N Use Efficiency

(Kg Grains/kg N applied)

IFA
 Pakistan Fertilizer
Consumption
28 Years Historical Trend
Thousand Tons

NFDC
 Pakistan Fertilizer
Outlook

NFDC : Historical numbers and projections up to 2011/12

Projection: Urea - 2020 off take based on NFDC growth till 2011/12
: DAP - Long term projection by IFA for global growth
Urea Supp
Demand
 PFL 350 NP
LCF 75 SSP
HPF 100 SSP
FFBL 450 DAP
Engro 100 NPK

FFC 2,438
Engro 850
DHL 450
PAFL 350
PFL 100
PCF 100
 Pakistan
Conclusion
• Fertilizer use continue to increase
+ Positive Factors
• Increasing population pressure and Food needs
• New varieties – high yield, high fertilizer need
• Increase in area of BT Cotton and other GM crops
• Supporting Commodity prices
– Negative Factors
• High prices of P and K
• Shortage of irrigation water availability
• Estimated growth pattern (CAGR)
– Nitrogen 2.5%, Phosphate 3.0%