Farm Input Workshop

Fertilizer Prices
Background and Outlook

3 July 2008
Population & Agricultural Area
World Cereal Stocks
Stock-to-Use Ratio

35% FAO USDA

30%

25%

20%

15%

10%

5%

0%
95/96 97/98 99/00 01/02 03/04 05/06 07/08

Source: FAO + USDA

Key Drivers of World Agriculture
and Fertilizer Demand

 Continued world population growth: More food and fiber

 Income growth: More meat, fish, fruits, vegetables, sugar and
veg oils; less cereals and pulses per capita
 High oil prices: Strong incentives for bioenergy production;
ag commodity prices higher and more volatile
 Limited immediately available additional arable land: No
alternative to increasing yields; increased cultivated area in
South America and SE Asia

 Growing environmental concerns: Increased recycling of

organic nutrient sources; optimization of nutrient use efficiency
 Improved technologies: Higher resource use efficiency
World Fertilizer Use By Region
AIR
AMMONIA
(NH3)

METHANE

DAP/MAP

SULPHUR SULPHURIC ACID

ROCK PHOSPHORIC ACID

World Sulphur Supply/Demand Balance
2006 to 2009

Mt S
60
Supply
58 57.3

56 53.1
54
Demand
52
49.6 54.4
50
48.1
52.1
48
48.6
46
47.7
44

42 - 0.4 -0.9 +1.0 + 2.9 Balance

40
2006 2007 e 2008 f 2009
Source: IFA
Sulphur Prices
Phosphorus Reserves
World Phosphoric Acid Supply/Demand
Balance: 2007 to 2011
Mt P2O5

Supply : + 4.2 % p.a. 43,3

41,1 41.5
40,2
39,7
40 38,5 38,9
37,5
36,8
36,0

30 Demand : + 3.6 % p.a.

20
2007 2008 2009 2010 2011
Source: IFA
World DAP Prices
Gas Reserves
- Nitrogen raw material
The Market
20 June 2008
Ammonia Prices
20 June 2008
World Urea Supply/Demand Balance
2006 to 2008

Source: IFA
World Urea Supply/Demand Balance
2007 to 2011
Mt urea Mt urea
Supply / Demand
20 Balance
200

18 Supply : + 5.2 % p.a. 180

16 160

14 140
15.1
12 Demand : + 3.4 % p.a. 120

10 12.3 100

8 80
6 8.4
60

4 40
2 4.5 20
1.9
0 0
2007 2008 2009 2010 2011
Source: IFA
World Urea Production and Trade

Mt urea
160
143.1 : + 5.7 %
135.3
140 129.5

120

100

80

60

31.4 35.1 : + 11.6 %

40 29.6

20

0
2004 2005 2006 2007 e

Production Exports Source: IFA

 Chinese Fertilizer Export Tariffs
DAP MAP P-Rock TSP/SSP

Before June 1 0 0 10% 0

2007
June 1- Sep 30 20% 0 20% 0

Oct 1-Dec 31 10% 0 20% 0

Jan 1-Feb 15 20% 20% 20% 0

Feb 15-Apr 20 35% 35% 20% 0

2008
Apr 1 - 20 35% 35% 20% 30%

Apr 20-Sep 30 135% 135% 120% 130%

World Urea Prices
Potash Reserves
World Potash Supply/Demand Balance
2006 to 2008
Mt K2O
40 38.9 : + 4 % 39.2 : + 1 %
37.4 - Supply

35

34.4 : + 4 %
32.9 : + 7 %
30
30.8 - Demand

25

20
2006 2007 e 2008 f Source: IFA
World Potash Supply/Demand Balance
2007 to 2011
Mt K2O
50
Supply : 3.2 % p.a. 43.2

38.4
40

36.4
30 32.4
Demand : 3.0 % p.a.

20

10

6.0 Balance 5.0 6.8

0
2007 2008 2009 2010 2011
Source: IFA
World Potash Prices

GRANULAR KCl
900 US$/t spot
800
700
600
East Coast Latin America cfr
500
400
300
200
100
0 West Europe fob export
93 9495 96 97 98 99 00 01 02 03 04 05 06 07 08
FMB 20 June
 In Short
Supply is very tight