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

1/24/2011
5th International Nitrogen Conference – New Delhi, India – 6 December 2010
Global Outlook for World Fertilizer Demand,

Supply and Supply/Demand Balances
Michel Prud’homme and Patrick Heffer

IFA Secretariat
Content
 Global Agricultural Situation
 Fertilizer Demand Outlook
 Global Supply Trends
 Nitrogen Capacity Evolution
 Global Supply-Demand Balances
1
1/24/2011
Global Agricultural Situation
World Cereal Production and Utilization

Million tonnes
Source: FAO
2
1/24/2011
World Cereal and Oilseed Production
Coarse Rice
Million tonnes Wheat Oilseeds Total
Grains (milled)
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
Drought in the CIS
Russia
• Wheat output: -31% Int’l Wheat Prices (US cents/bu)
• Coarse grain output: -46%
• Grain export ban until June
• Grain exports down from 22 to 4 Mt
+50%
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 Source: Financial Times
3
1/24/2011
Smaller Than Expected US Maize Harvest

US Maize Yield Forecasts and Crop Ratings
Source: IGC
World Cereal Stock-to-Use Ratio
Ending stock reduction in

2010/11
World:
• -12% for wheat
• -10% for coarse grains
Major exporters:
• -16% for wheat
• -41% for coarse grains
Source: FAO Source: USDA
4
1/24/2011
Fertilizer Prices Relative to

Agricultural Commodity Prices
Ratio based on international prices.

It can be quite different at the local level
Fertilizer prices: N. Africa DAP; Yuzhnyy prilled urea; Vancouver (std) Potash
Sources: British Sulphur, Financial Times and IMF
Fertilizer Demand Outlook
5
1/24/2011
Global Fertilizer Demand Short-Term Prospects
180
K2O
160 P2O5
140 N Mt nutrients
120
2007/ 2008/ 2009/ 2010/ 2011/
100 Change Change Change
08 09 10 (e) 11 (f) 12 (f)
80
60
40 N 100.5 98.5 102.6 +4.1% 104.2 +1.6% 106.9 +2.6%
20
0
P 2O5 38.4 33.6 37.5 +11.5% 39.8 +6.0% 41.7 +4.7%
K 2O 28.9 23.5 23.5 +0.3% 27.4 +16.3% 29.3 +7.2%
167. 155. 163.

Total +5.2% 171.3 +4.7% 177.9 +3.8%
9 6 6
Source: IFA, December 2010
Projected Evolution of Regional

N Fertilizer Demand (Mt N)
6
1/24/2011

P Fertilizer Demand (Mt P2O5)
Source: IFA, December

2010

K Fertilizer Demand (Mt K2O)
7
1/24/2011
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
Global Fertilizer Demand Medium-term Outlook
Base year
Mt nutrients
200
K2O P2O5 N Av. 2007/08
180 2014/15
to 2009/10 Change
160 (f)
(f)
140
120 N 100.9 112.8 +1.9 % p.a.
100
80 P2O5 36.7 45.1 +3.5 % p.a.
60
K2O 25.3 32.6 +4.5 % p.a.
40
20 +2.7 %
Total 162.9 190.5
0 p.a.
Source: IFA, June and December 2010
8
1/24/2011
Regional N Fertilizer Demand

Medium-term Outlook (Mt N)
East Asia
South Asia
North America
W+C Europe
Latin America
avg 2007/06-2009/10
EECA
Variations to 2014/15
West Asia
0 5 10 15 20 25 30 35 40 45
Source: IFA, June and December 2010
Global Supply Trends
9
1/24/2011
World Nutrient Supply Trends

Mt nutrients
230
Consumption
220
Global NPK sales 212 215
NPK Production 215
210
201
204
200
190 194
180
170
2002 2003 2004 2005 2006 2007 2008 2009 2010
World Nutrient Uses

Mt nutrients
220
200 Nutrient uses as fertilizers, rose
6% and accounted for 80% of
180 Fertilizer total uses.
160
2010 fertilizer consumption :
140 record level.
120
100
80
Industrial uses and other rose
60 Industrial
11%, but still 2% short of record
level of 2007.
40
20 Other
-
2005 2006 2007 2008 2009 2010
10
1/24/2011
Nitrogen Capacity Evolution
Ammonia Feedstock Trends and Yearly Changes

Mt N
200
Other Coal Natural Gas
150
100
50
-
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
6 Others Coal China
4
2
0
-2 2007 2008 2009 2010 2011
11
1/24/2011
Natural Gas Prices - Short Term Trends

14,00 US$/MMBtu
12,00
Ukraine
10,00
8,00
Europe
6,00 China
USA
4,00
Russia
2,00
0,00
2005/06 2007 2008 2009 2010 2011
Azotecon, US EIA, Endex, FirstEnergy, IFA members in Russia, Ukraine, China
Ammonia Producing Countries : Future Capacity
Mt N
80
60
40 2010 2015 159 Mt in 2010
20
to 188 Mt in 2015
- +3.5% per annum
12
1/24/2011
Nitrogen Fertilizer Consumption

Mt N
100,0
90,0 AS
80,0 Calc.amm.
70,0 Dir Amm
60,0 N Sol
50,0 MAP/DAP
40,0 AN
30,0 ABC
20,0 NP K
10,0 Urea
-
1990 1992 1994 1996 1998 2000 2002 2004
Source: IFA
World Nitrogen Capacity : Annual Developments
8 Mt N
7
1,0
6 Other
0,7
5 1,6
1,4 2,5
4 1,3 Urea
3 1,2 6,0
5,0
2 3,9 4,2
3,5 3,4
1 2,3
0
2008 2009 2010 2011 2012 2013 2014
13
1/24/2011
Urea Capacity : Potential Supply Developments
Mt N
50
40
30 2010 2015
20 83 Mt N in 2010
10 to 105 Mt N in 2015
0 +5.4% per annum
Global Supply – Demand Balances
14
1/24/2011
Global Supply - Demand Balances : 2007 to 2011

170 Mt nitrogen N Supply Demand
160
150
139
140 133 135
130 130
130 134
130
127 125 125
120
2007 2008 2009 2010 2011
170 Mt urea 164

160 157
153
150 146 155
142 149
147
140
139 142
130
120
2007 2008 2009 2010 2011
Global Nitrogen Balances : 2007 to 2014

Mt nitrogen N Supply Demand
200
157
150 130
143
100 125
50
0
2007 2008 2009 2010 2011 2012 2013 2014
Mt urea
200 195
142 176
150
139
100
50
0
2007 2008 2009 2010 2011 2012 2013 2014
15
1/24/2011
Regional Nitrogen Demand Growth

AMMONIA Mt N UREA Mt N
Fertilizers +14 Mt Industrial +6 Mt Fertilizers +12 Mt

OCEANIA OC
EAST ASIA EA
SOUTH ASIA SA
WEST ASIA WA
AFRICA AF
LATIN AMERICA LA
NORTH AMERICA NA
EECA EECA
CENTRAL EUROPE CE
WEST EUROPE WE
- 2 4 6 8 0 1 2 3 4 5 6 7
Global Supply - Demand Balances : 2007 to 2011

Supply Demand
50 Mt phosphoric acid P2O5

38 39 40 41
40 38
37 35 37 39
30 33
20
10
-
2007 2008 2009 2010 2011
50 Mt potash K2O
37 38 39
40 35 36
30 33 33
30
28 25
20
10
-
2007 2008 2009 2010 2011
16
1/24/2011
World Nutrient Supply Trends : 2002 to 2011e

Mt nutrients 1. Robust demand for all nutrients
230
Global consumption 224 worldwide, but with inherent high
Sales, historic and potential volatility.
220 NPK Production
222
2. Firm growth in industrial sectors.
210 3. Adequate capacity and effective
capacity.
200
4. New capacity emerging outside China.
5. Potential tightness in supply during the
190
first half of 2011, due to the timing of
180
start-up, ramp-up on new capacity and
trade measures.
170 6. Rising trend of feedstock costs.
7. Uncertainties on China
Thank you for your

attention
www.fertilizer.org
17

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1/24/2011

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Global Outlook for World Fertilizer Demand,

Michel Prud’homme and Patrick Heffer

 Global Agricultural Situation

 Fertilizer Demand Outlook

 Global Supply Trends

 Nitrogen Capacity Evolution

 Global Supply-Demand Balances

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Global Agricultural Situation

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

World Cereal Production and Utilization

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

World Cereal and Oilseed Production

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%

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Drought in the CIS

Source: USDA + IGC Source: Financial Times

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Smaller Than Expected US Maize Harvest

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

World Cereal Stock-to-Use Ratio

Ending stock reduction in

Source: FAO Source: USDA

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Fertilizer Prices Relative to

Ratio based on international prices.

Sources: British Sulphur, Financial Times and IMF

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Fertilizer Demand Outlook

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Global Fertilizer Demand Short-Term Prospects

K 2O 28.9 23.5 23.5 +0.3% 27.4 +16.3% 29.3 +7.2%

167. 155. 163.

Source: IFA, December 2010

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Projected Evolution of Regional

Source: IFA, December 2010

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Projected Evolution of Regional

Source: IFA, December

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Projected Evolution of Regional

Source: IFA, December 2010

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Some of the Main Uncertainties

 Evolution of agricultural commodity prices

 Evolution of fertilizer prices relative to crop prices

 Evolution of the world economic context

 New policies aimed at increasing nutrient use

Source: IFA, December 2010

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Global Fertilizer Demand Medium-term Outlook

Source: IFA, June and December 2010

5th International Nitrogen Conference – New Delhi, India – 6 December 2010

Regional N Fertilizer Demand

Source: IFA, June and December 2010