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Publication > Issue > Articles

Just a flash in the pan? Or here to stay?

Summary

In this article, Oliver Hatfield, Director of Integer Research, explores the relationships between energy and fertilizer markets, and considers whether biofuels will have more than a short-term impact on the fertilizer industry.

Abstract

The world’s inorganic fertilizer industry has long-established links with world energy markets, at least indirectly. Most fertilizer manufacturers contend with fluctuations in oil and gas prices, absorbing higher production costs when energy prices are high, and passing on lower costs through lower fertilizer prices to farmers when energy costs decline. Until recently, however, the link between energy markets and fertilizer demand has been indirect or detached. Changes in demand or supply of energy products have not impacted directly on fertilizer demand via agriculture. This relationship has rapidly changed in recent years. The development of a market for commercial fuel made from certain crops means that rising oil and other energy prices directly result in increased demand for fertilizers. But is this a temporary and politically driven phenomenon? Will biofuels leave a long-term mark on agriculture?

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High fertilizer volumes boost investments

Summary

The Black Sea Ports help to serve a wealth of sea trade shipping between South Eastern Europe and Anatolia by way of the Mediterranean Sea. It is connected to the Mediterranean by the Bosporus and the Sea of Marmara and to the Sea of Azov by the Strait of Kerch. It is surrounded by a host of significant countries including Turkey, Romania, Bulgaria, Ukraine, Russia and Georgia. A number of the commercial sea ports bordering the Black Sea coast have seen a steady growth of modern­isation and structural develop­ment over the last ten years. ­

Abstract

Vicky Carpenter describes the further plans to improve cargo turnover and transhipment at the following ports in the future.

  • Varna
  • Constantza
  • Yuzhny
  • Kherson
  • Mariupol
  • Novorossiysk
  • Samsun

 

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Getting a grip via carbon trading

Summary

The Kyoto Protocol pledged to reduce greenhouse gas emissions. This has provided opportunities within the fertilizer industry to reduce emissions throughout the value chain, including nitrous oxide abatement at nitric acid plants, enhanced energy efficiency at raw material mining operations, and onsite power generation. The progress to date is reviewed.

Abstract

At the heart of the Kyoto Protocol is the recognition that man-made climate change is a fact. However, the implications remain subject to intense debate, as is the question of how to address them.

The Kyoto Protocol is an agreement made under the United Nations Frame­work Convention on Climate Change (UNFCC). It opened for signature in December 1997 and entered into force in February 2005. By December 2006, the Kyoto Protocol covered 169 countries and over 55% of global greenhouse gas (GHG) emissions. It is underwritten by governments and covered by global legislation enacted under the aegis of the United Nations. Governments fall into two categories: the industrialised Annex 1 countries have binding emissions targets and must submit an annual GHG inventory; Non-Annex 1 countries have no GHG reduction obligations, but may participate in the Clean Development Mechanism. China, India and Brazil are among the countries that fall into the latter category.

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Time for action: Rio Tinto's agenda

Summary

This review addresses Rio Tinto's position on climate change and is based on the Rio Tinto 2006 Sustainable Development Review and the Corporate Social Responsibility Seminar held on 11 April 2007.

Abstract

Rio Tinto is a leading international mining group focused on finding, mining and processing mineral resources. The company operates in more than 25 countries, covering six product groups: iron ore, energy (coal and uranium), copper (also including gold), aluminium, diamonds and industrial miner­als. The latter include borates, which Rio Tinto mines and processes at locations in the United States and Argentina to provide a well-known range of fertilizer micronutrients. Rio Tinto has also added potash to its minerals portfolio, having assumed ownership of the Potasio Rio Colorado project in Argentina. In 2006, Rio Tinto achieved gross sales revenues of $25.4 billion and profits of $7.8 billion.

Rio Tinto is committed to sustainable development, not just because it is the right, responsible and ethical approach to managing the earth’s natural resources and to safeguard the health of the planet for future generations, but because it also makes sound business sense.

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A mixed outlook

Summary

Dr. Nina I. Khangaldyan is Head of the Marketing Department of CJSC InterGazInvest and is a very highly respected observer of the Russian fertilizer industry. In this review, based on her presentation at Global Fertilizers 2007, Dr. Khangaldyan analyses the trends and the prospects of the development of the fertilizer industry in the light of potential development of Russian economy in the years ahead.

Abstract

This review covers four principal issues:

  • The role of the mineral fertilizer industry in the Russian economy.
  • The main trends in the Russian fertilizer industry.
  • The primary issues facing the Russian fertilizer industry.
  • The prospects for the future development of the industry.

The production of mineral fertilizers plays an important role not only in the Russian economy, but also in the world market. In Russia, fertilizers account for more than 20% of chemical industry production, 35% of exports and are one of the most profitable and financially stable industries in the Russian economy. Traditionally, even in the days of the Soviet Union, the Russian fertilizer industry has played an important role in the world production and trade in mineral fertilizers. Today, Russia accounts for between 6-7% of the world’s fertilizer production and for 13-15% of exports. This indicates the strong export orientation of the country’s industry, especially in the export of AN, urea, potash and MAP (Table 1).

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A marriage between biologicals and soil chemistry

Summary

Hondo Chemical has developed an organic sulphuric acid that is particularly suitable for growers with high pH soils.

Abstract

Sulphur is widely applied to alkaline soils, lowering its pH and increasing the solubility of beneficial plant nutrients and facilitating their uptake. The pH adjustment takes place through the bacterial conversion (primarily by the Thiobacillus species) of sulphur to sulphuric acid by the equation:

S2 + 3O2 + 2H2O -> 2H2SO4

The rate at which the thiobacillus bacterium converts the S particle to sulphuric acid is a function of particle size. The smaller the particle, the greater the exposed surface area, the faster the biochemical reaction and the faster the crops will benefit.

This conversion of sulphur by the thiobacillus bacteria to sulphuric acid occurs naturally in the soil, but at a slow rate and it produces a low concentration, normally less than 3 wt.%. The US company Hondo Chemical has devised a new biochemical process to produce a “superior form of natural” sulphuric acid, several times the strength of that normally produced by nature.

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New subsidy regime has unequal impacts

Summary

David Hayes, Asia Correspondent, recently visited Sri Lanka. He finds that growers and fertilizer distributors alike are trying to make sense of the government's new subsidy policies.

Abstract

Sri Lanka’s fertilizer market has undergone a major transformation during the past 12 months, following the government’s decision to take over the handling and supply of urea to the highly subsidised rice growing sector. State-run fertilizer corporations were made responsible for supplying rice farmers with their chemical nutrient requirements, forcing private fertilizer distributors to look elsewhere for business.

Private dealers have concentrated on the plantations sector as a result, in addition to supplying small farmers growing a range of other crops. Further changes are in the air as the government has recently offered to return to the private sector a 40% share of the urea market, in a bid to improve distribution efficiency and reduce the losses that have resulted from transferring urea to state agency distribution.

While discussions continue over how a 40% private sector scheme could work, the fertilizer sector is hopeful that business will pick up in the longer term as more land comes into production. However, expanding the agricultural land will depend partly on a peaceful solution being found to the present insurgency affecting the north of Sri Lanka, which is the present cause of large areas of fertile land remaining idle.

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A rosier outlook

Summary

The fertilizer industry in Turkey was launched in the 1950s, under the auspices of the state. Further expansion occurred in the 1970s as the private sector became more closely involved. More recently, a series of privatisations has reduced government involvement in fertilizer production, although the state has not retreated entirely from the agricultural sector overall. The changes of the past decade are outlined here.

Abstract

The 13 years that have elapsed since IFA previously convened its Annual Meeting in Istanbul have seen many radical changes in the Turkish economy, which have been echoed in the country’s fertilizer industry. The 1994 IFA Annual Conference was convened against a background of political uncertainty and economic crisis, which was marked by successive devaluations of the Turkish lira and burgeoning indebtedness (which alone required servicing of about $7.5 billion in 1994). Subsidies played a key part in economic activity at the time, and the government’s attempts to revive the Turkish economy with a recipe of free market measures were being strongly resisted. That environment of uncertainty affected the Turkish fertilizer industry, which was particularly concerned about the prospect of reduced subsidies to the farming sector. At the time, a representative of the leading producer, Toros Fertilizers, expressed the fear that a combination of reduced subsidies and higher prices in the wake of inflation would lead to a fall of as much as 40% in Turkey’s fertilizer consumption in 1994/95. In the event, these claims were not much exaggerated, as actual fertilizer consumption fell by 30% during the year. (Fig. 1)

The Turkish fertilizer industry, like the economy overall, managed to weather the storms of that period, and it prevails today in a form that is very recognisable from 13 years ago – with one notable distinction. Today’s industry is primarily a private sector one. While the Turkish economy has undergone some radical changes since the mid-1990s, the process of transformation proved less traumatic than many observers had expected.

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Ust-Luga ­achievement

Summary

The Ust-Luga Multi-Purpose Terminal envisages a major increase in Russia's ability to handle dry bulk and other freight via the Baltic Sea. The latest stage in this ambitious project is about to come on stream, with the impending inauguration of the European Sulphur Terminal (EST). This terminal is being equipped with state-of-the-art bulk handling equipment that will meet the highest environmental standards.

Abstract

The impending inauguration of a modern sulphur handling terminal marks the latest stage in the development of the new Ust-Luga Multi-Purpose Terminal. This is a project which is of considerable economic and strategic significance to Russia, which envisages a total freight turnover of up to 35 million t/a – a considerable increase on the capacity offered by Russia’s principal Baltic port of St. Petersburg, which has handled around 28-30 million t/a. The project has the support of the European Bank for Reconstruction and Development (EBRD).

The Multi-Purpose Terminal is being developed to consist of dry bulk cargo transhipment facilities, a container terminal, and RoRo/ferry facilities. The project reflects the increased volumes of trade that are being conducted in the Baltic Sea region, which already had some of the busiest shipping routes in the world. Once the Ust-Luga Multi-Purpose Terminal becomes fully operational, traffic on the Baltic Sea is expected to increase by between 10-15%.

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A timely look at zinc

Summary

Immediately after the IFA Annual Conference, Zinc Crops 2007 will also convene in Istanbul (24-26 May). This international scientific conference will be jointly sponsored by IFA and the International Zinc Association and will provide a very timely review of the latest knowledge and best agricultural practices in addressing one of the most common micronutrient deficiencies in plants. Zn deficiency is particularly prevalent in cereals, causing severe decreases in crop yield and quality. The measures being undertaken to correct Zn deficiency are reviewed, together with the products available.

Abstract

Although awareness is increasing around the world about the importance of micronutrients in sustainable crop production, deficiencies in crops continue to be reported and much remains to be done to ensure that micronutrient supply does not limit crop yield. (Importance of Micronutrients in Sus­taining Crop Nutrition, Bernard Dell, Murdoch University, Australia. Paper presented at IFA Agriculture Conference, Kunming, China [March 2006].) World soils are particularly deficient in three micronutrients, namely iron (Fe), boron (B) and zinc (Zn). In the case of Zn, B.J. Alloway of the International Zinc Asso­ciation has commented that “it is highly probable that there are several million hectares of paddy rice which could benefit from zinc fertilisation.”

The Green Revolution of the 1960s and 1970s led to unprecedented advances in rice yields, fuelled in particular by the widespread application of N, P and K macronutrient fertilizers. In recent years, the growth in yields has levelled off, and it is clear that fundamental improvements in rice yields are now being constrained by shortfalls in micronutrients in nutrient-poor soils.

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Away with those stacks

Summary

The perception that the global phosphate industry is at a turning point is gaining more widespread favour. The heart of the matter is the vast tonnages of by-product phosphogypsum that the industry ­generates. At present, the phosphogypsum is being accumulated into ever increasing stockpiles, as in Central Florida, or else dumped in water courses or oceans. Finding more appropriate uses for this ­­by-product poses a fundamental challenge.

Abstract

By-product phosphogypsum (calcium sulphate) is produced involuntarily in the phosphoric acid manufacturing process, when phosphate rock reacts with the addition of sulphuric acid. For every tonne of phosphoric acid produced by the wet process method, some 4-5 tonnes of phosphogypsum (PG) are also manufactured.

The principal problem with PG is what to do with it. In Central Florida alone, the phosphate industry generates an estimated 32 million t/a of this by-product. By 2004, the US Environmental Protection Agency (EPA) estimated that the PG stockpile totalled 1 billion tonnes. Some 20 PG stacks are currently extant in Central Florida.

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Technology update: mist eliminators

Summary

We review the main issues affecting mist eliminator performance and report on recent innovations in design and specifications.

Abstract

Buoyant demand for phosphate fertilizers and the continuing upsurge in industrial activity throughout the world is reflected by the increased production of sulphuric acid. Producers are consequently seeking ways of ensuring that plants can operate at consistently high operating rates, paying particular attention to opportunities to debottleneck sulphuric acid installations, increase the efficiency of operations and enhance environmental performance.

Close attention has been paid to one particular aspect of sulphuric acid production: mist elimination. The production of sulphuric acid generates considerable quantities of mist, which is created any time a liquid comes into close contact with a flowing gas. The entrainment of liquid droplets into the gas stream generates a mist, which can result in process inefficiencies, product losses and equipment damage. (Mitigating Acid Mist in Sulphuric Acid Plants¸ Sulphur, No. 310, May/June 2007.)

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A promise fulfilled

Summary

The Fertilizer Latin America Conference is widely recognised as the leading annual event for the Latin American fertilizer industry. This year's programme of presentations offered many insights into this rapidly evolving region's thriving agricultural sector.

Abstract

Since British Sulphur Events held its pioneering Fertilizer Latin America Conference in Caracas in 1989, the meeting’s consistent theme has been that the region is one of massive promise. In the course of the 1990s and into the present century and decade, that promise has steadily been turned into real fulfilment throughout Latin America: fulfilment in the form of stable democratic and economic institutions, fulfilment in the form of sustained economic growth, and above all, fulfilment in the form of an agricultural sector that is becoming a world leader in several aspects. This has proved to be a bonanza for fertilizer consumption in Latin America and an excellent reward for those investors who put their faith in the forecasts of growth that were signalled in previous Fertilizer Latin America conferences.

While three years of rapid growth in the demand for fertilizers throughout Latin America were followed by an abrupt and unexpected downturn in 2005, most notably in Brazil, the view prevailed among industry analysts that this setback would prove a temporary one. This faith appears to have been justified. As in previous years, developments in Brazil dominate any assessment of the prospects for the demand and supply of fertilizers throughout Latin America: Brazil accounts for 40% of South America’s GDP and is the world’s largest fertilizer market, accounting for 60% of total Latin American market volumes. It is therefore heartening to note that Brazil now appears to be getting back on track, in line with previous forecasts of demand.

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