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Publication > Issue > Articles

Reasons to be cheerful - maybe

Summary

In this assessment of the market drivers for 2013, we ask whether there will be a swing from a seller's to a buyer's market this year and if the commodities' super-cycle is now over. We also assess how global and regional supply/demand balances, agricultural prices and potential swings, market volatility, stock levels and elasticities (including farmers' ability to afford inputs) could affect global fertilizer markets.

Abstract

Although fertilizer industry analysts tend to assume that crop prices are the main driver of fertilizer demand (and this is clearly the case for some crops in some markets), other factors need to be taken into account. In particular, a wide range of macroeconomic factors influence demand, including swings in the values of the leading currencies, economic management by governments (including interest rates and tax regimes), the availability of credit, and government policies regarding the promotion of food production, subsidies and environmental protection. There is the further suggestion that as part of the overall market for commodities, fertilizers are pulled along in a so-called super-cycle. A further factor, altogether random, is the impact of weather conditions. The past year was marked by volatility in the primary agri-commodity markets. Analysts at Rabobank believe that this volatility will continue into 2013. Their prognosis is that grain and oilseeds markets will be affected by a supply squeeze in the first six months of the year, before an expected rebound in production leads to a weakening in prices in the second half of the year. Rabobank predicts that soybeans will be the commodity most likely to show the largest price decline by the end of 2013. By contrast, oil palm is expected to be a strong performer, especially as Chinese imports and demand for biofuels drive prices higher. These forecasts, pro and con, have particular implications in the expected demand for potash, for which both soya and oil palm have a high nutrient requirement. Soya is also phosphate-intensive. Keywords: Outlook, Forecast, Supply / demand balance, Agricultural prices, Cereals, Grain Wheat, Corn, Soybeans, USDA, Crop prices, US Cornbelt, Midwest

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AFA addresses food security

Summary

As the Arab Fertilizer Association (AFA) convenes its 19th Annual International Forum and Exhibition in Cairo, Dr. Shafik Ashkar, AFA Secretary, shows how the Arab region's fertilizer producers are committed to producing high added-value products that meet the needs of a growing population.

Abstract

Global food security continues to be one of the greatest challenges of the 21st century. The population has doubled in the last 50 years and to meet the expected population growth, the global production of crops will need to increase. There is a clear relationship between the historical growth in fertilizer use and the increase in world food production. Certainly, fertilizers should be incorporated with other sources of crop nutrients, depending on what is available to the farmer, in order to ensure best crop production and minimal environmental impacts. The Arab fertilizer industry believes that its products will help to feed the world. The industry is playing a prominent role in providing vital support to the regional and world agricultural sector and supplying a key input in the provision of strategic food crops. An abundance of a wide range of raw materials, including natural gas, phosphate rock and potash, has enabled the Arab World to become a major hub of the international fertilizer industry. Arab fertilizer producers have been consolidating their share of global production during the past three decades. Massive reserves of raw materials in different Arab countries have allowed for the rapid expansion and development of this industry, especially during the final years of the 20th century. Keywords: Arab Fertilizer Association, AFA, Egypt, Arab Gulf, Capacity, Ammonia, Urea, DAP, Phosphates, Capacity

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FLSmidth boosts Arab phosphate capability

Summary

FLSmidth, the specialist supplier of phosphate processing and production equipment, is helping the leading Arab phosphate producers enhance their capabilities.

Abstract

As leading Arab suppliers of phosphate fertilizers, Morocco, Saudi Arabia and Jordan are committed to investing in enhanced production and handling capacity. Helping the producers in these countries to achieve their strategic goals is the specialist supplier of phosphate processing and production equipment, FLSmidth A/S. In June 2012, the company announced that it had received an order worth $90 million from OCP, Morocco to supply equipment and technology for the new phosphate terminal at Jorf Lasfar, where production and shipment facilities are being expanded as part of the Jorf Lasfar Phosphate Hub project. Keywords: Terminal, Bulk handling, Phosphates, Equipment, Materials handling

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Orascom on the cusp of change

Summary

The year 2012 proved a dramatic one for the Egyptian company, as it announced the demerger of its fertilizer business and committed itself to a major investment in a US nitrogen facility.

Abstract

The Egyptian company Orascom Construction Industries (OCI) continues to raise its profile in global markets, achieving particular prominence in the fertilizer sector. OCI has been widely recognised as one of the most dynamic companies in the North African and Middle Eastern region, accumulating and expanding its fertilizer asset base and establishing itself as a leading multinational player in world nitrogen markets. OCI is Egypt’s leading EPC (engineering, procurement and construction) contractor which has extended its portfolio far beyond its base in Cairo, and the company is now active in more than 35 countries, employing more than 90,000 people around the globe. OCI can trace its origins back to 1950, when the company was founded by Onsi Sawaris. The group expanded into a diversified range of activities, embracing telecoms, hotels and technology. These now form autonomous divisions within the Orascom Group, remaining under a majority 54% control by the Sawaris family. Keywords: Construction, Engineering, Contractor, Açu Superport, Brazil, US Cornbelt, Urea

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IFDC – a catalyst in Africa and Asia

Summary

From its base in Muscle Shoals, Alabama, IFDC focuses on increasing and sustaining food security and agricultural productivity in developing countries through the development and transfer of effective and environmentally sound crop nutrition technology and agri-business expertise. Two projects in Africa will help advance that region's improved progress towards food security and self-sufficiency, while IFDC is launching a project in Bangladesh that will measure greenhouse gas emissions from rice cultivation and improve nutrient use efficiency.

Abstract

In July 2012, IFDC announced two projects in Africa that will build on the success of another recently-completed project, Catalyze Accelerated Agricultural Intensification for Social and Environmental Stability (CATALIST). This earlier project took place over a five-and-a-half-year period in Burundi, Rwanda and the North and South Kivu provinces of the Democratic Republic of Congo (DRC). CATALIST-2 will build on the momentum of the original project, while CATALIST-Uganda will take the same concepts and adapt them to the specific needs of Uganda. Each project is funded by the Netherlands Ministry of Foreign Affairs. CATALIST initially focused on the introduction of integrated soil fertility management (ISFM), a set of agricultural practices adapted to local conditions to maximise the efficiency of crop nutrient use and improve agricultural productivity. ISFM gives a prominent role to fertilizers, as well as soil amendments (in the form of lime and direct-application phosphate rock), organic matter (crop residues, compost and green manure) and the use of crop rotation. Keywords: IFDC, Africa, Development programme, Crop production, Technology transfer, USAID, Soil testing, ISFM, GHG emissions, Deep placement

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Royal opening of pilot plant

Summary

Abstract

On 11 December 2012, His Excellency the Heir Apparent Sheikh Tamim bin Hamad Al Thani officially opened the Sahara Forest Project pilot facility near Doha, Qatar. The project was described in the May/June 2012 issue of Fertilizer International (Green light for a green desert, p18-21) and has brought together Qatar Fertilizer Company (QAFCO), Yara International and The Sahara Forest Project AS as partners in the development of a project to harness seawater greenhouse technology that will in turn facilitate the production of clean water, clean energy and food in a region where all three resources are in scarce supply. Keywords: Pilot plant, Qatar, QAFCO, Yara International, Desalination

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Enhanced carbon capture in N plants

Summary

We review the technologies available and their likely impact on the nitrogen fertilizer industry.

Abstract

In September 2012, the US energy, grains and food company CHS announced that it will serve as an exclusive off-take company for the urea fertilizer produced by the Summit Texas Clean Energy Project (TCEP) plant at Penwell, near Odessa, Texas. This plant is expected to produce 700,000 s.tons/a of urea. Commercial operation is scheduled to begin in 2016. One significant aspect of the project, which will gasify coal to make not only urea but power and compressed CO2 for enhanced oil recovery (EOR), will be the capture of 90% of the plant’s carbon emissions – a pioneering move in the nitrogen fertilizer industry. The project will start sequestering carbon during start-up and testing in 2016. The TCEP is being developed by Summit Power Group Inc. and involves the building of the world’s first integrated gasification combined cycle (IGCC) clean-coal power plant, carbon capture and storage facility. The target of 90% carbon capture equates to 2.5 million t/a of carbon dioxide. If accomplished, this would be more than any other commercial-scale power plant operating anywhere in the world, prompting Summit to declare that TCEP’s projected overall emissions will be far lower than those of any existing fossil-fuel power plants. Keywords: Carbon capture, Coal gasification, Urea, SOx, NOx, Greenhouse gases, GHGs, IGCC, Front end energy and design

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DAP or MAP?

Summary

We assess the production and application criteria between the two leading ammoniated phosphate fertilizers.

Abstract

Diammonium phosphate [(NH4)2HPO4] and monoammonium phosphate [(NH4)H2PO4] are the principal ammoniated phosphate fertilizers. Both are excellent sources of phosphorus and nitrogen and have a good agronomic record in terms of yield increases. The first major production of MAP began in the United States around 1920, while major production of DAP was initiated in about 1954. Manufacture of a third member of the ammoniated phosphate fertilizer group, ammonium polyphosphates (APP), began in the late 1950s. MAP and DAP are granular, while APP is generally fluid. MAP is manufactured by combining one mole (molecular weight) of ammonia with one mole of phosphoric acid, while DAP is produced by adding two moles of ammonia with one mole of phosphoric acid. MAP crystallises in tetragonal prisms. Greater levels of impurities tend to be found in MAP. Keywords: New capacity, Ammonia, Phosphates, Supply/demand balance

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A new landscape for potash?

Summary

The climate for investment in greenfield potash projects may be cooling, but other capacity expansions are still under way, notably in Canada and Russia. We gauge the likely impact on the market balance in the medium- and longer terms.

Abstract

High prices for potash have attracted an unprecedented surge in investment projects in the potash sector. While 2012 was marked by relatively flat prices (Fig. 1), the bull market is expected to continue into 2013/14, and there is a consensus among the global potash producers and analysts that the industry fundamentals are very strong indeed. These fundamentals are underpinned by growing demand, which is the result of increasing global population, pressure on available arable land, income growth in developing countries, as well as potential demand growth stemming from the biofuels and scientific sectors. In addition to a higher demand for food as driven by a population that is forecast to grow from a present 7 billion to 9 billion by 2050, people will be improving their diets, and farmers will need to produce 70% more food on little new land. Potash will play an ever more significant role in helping to achieve vital gains in agricultural productivity. As measured against these highly positive fundamentals for consumption, the supply of potash to meet rising world poses a greater challenge. There are relatively few world-ranking players among the producers at present; potash is a relatively scarce mineral, with the major reserves located in remote areas of Canada, the Former Soviet Union and elsewhere, and any increase in production capacity requires high capital expenditures and long lead times. Historically, the barriers to entry in the industry have been high and there have been a limited number of players able to bring additional capacity on stream. Keywords: Potash, Greenfield, Brownfield, Junior mining company, SOP, Potassium sulphate, New capacity

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Potash fertilizer production in the 21st century

Summary

ERCOSPLAN, the German company that specialises in potash engineering and project assessment, hosted a symposium in its home town of Erfurt, capital of the state of Thuringia, to assess Potash Fertilizer Production in the 21st Century. The meeting attracted some 400 participants from every sector of the worldwide potash industry. They listened with keen interest to the presentations that assessed the market prospects, outlined new projects and explained the latest advances in mining and processing technology. We review the highlights from the meeting.

Abstract

Welcoming the Symposium participants, Dr. Henry Rauche, Managing Director and CEO of ERCOSPLAN, observed that the event marked a double jubilee for the company: 60 years of potash engineering made in Erfurt, and 20 years of ERCOSPLAN as an independent and innovative consulting and professional engineering company, providing project management services in all sectors of the extraction and processing of industrial potash and mineral salts. “The year 2012 has provided us with an opportunity to commemorate two important events in our company history and to acknowledge their significance for the German as well as the international potash industry,” Dr. Rauche said. “Sixty years ago, VEB Zentrales Projektierungs und Konstruktionsbüro für die Kaliindustrie und den Nichterzbergbau (ZPK) was founded in Erfurt in order to serve as the consulting and engineering partner for the modernisation and expansion of production of the 12 potash and five rock salt mines in the former German Democratic Republic (GDR) that resumed production after World War II. From this ‘pre-predecessor’ of the ERCOSPLAN Group of Companies, Kali-Ingenieurbüro Erfurt (KIB) was formed three years later. A purpose-built office building was constructed for it at Erfurt’s Arnstätter Strasse 28, which has been the base for it and the successor companies since 1956. Keywords: Symposium, Deposits, Reserves, Greenfield, Junior mining, Project, Carnallite, Sylvinite, Halite, Solution mining, R&D, Brine

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