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Another banner year in the Middle East

Summary

The Arab countries of the Middle East and North Africa are now getting into their stride as they harness their abundance of natural resources to develop modern and competitive export-oriented fertilizer industries. Recent developments in new production capacity are reviewed and the implications for ­international trade and global supply and demand balances are assessed.

Abstract

Spurred by increasing globalisation and taking account of the European Union economic model, Arab countries have sought closer ties in order to address the challenges arising from developments in international economics and trade. A comprehensive Arab Free Trade Zone has for long been an ideal throughout North Africa and the Middle East, and this spirit has underpinned the Arab Fertilizer Association (AFA) throughout its existence. The AFA can point to many achievements in its 30-year existence, as will be reflected when it holds its 13th International Annual Conference between 6-8 February 2007. This year, AFA moves away from the familiar venue of Cairo to convene at the Intercontinental Hotel, at the Red Sea resort of Sharm El-Sheikh, Egypt.

The AFA is a non-profit, non-governmental pan-Arab international organisation that numbers more than 130 companies representing 28 countries, and the International Annual Conference attracts participants from every part of the world, as the region has assumed the greatest importance as an arena for business and the exchange of information. The chemical fertilizer industry is a bright jewel in the Arab region’s economic crown, and as Dr. Shafik Ashkar, AFA Secretary General noted, both Gulf Co-operation Council (GCC) countries and their North African counterparts “contribute in fulfilling a huge amount of international market needs and covering a significant volume of shortage in chemical fertilizers in chemical fertilizers on the international level.”

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Water availability and Middle Eastern agriculture

Summary

Aridity prevails throughout the Middle East and makes it one of the poorest regions in the world in water resources. Fertigation and hydroponic cultivation offer a chance to mitigate this scarcity and develop a viable indigenous agriculture, but with important provisos about soil management. Progress among the countries in the region has varied, however, as described in this review.

Abstract

The Middle East was mankind’s cradle of agriculture, in Mesopotamia around 9500 BC when farmers first began to select and cultivate food plants with specific characteristics. By 7000 BC, sowing and harvesting had reached Egypt, spreading along the banks of the Nile River. The intensive cultivation of land, mono-cropping, basic irrigation and the use of a specialised labour force can be traced in the region as far back as 5000 BC.

Roman agriculture built on the pioneering developments in the Middle East, while during the Middle Ages, Muslim farmers in North Africa and the Near East developed and disseminated agricultural technologies, including irrigation systems based on hydraulic and hydrostatic principles, and the use of water-raising machinery, dams and reservoirs. Muslim farmers also wrote location-specific farming manuals and were instrumental in the wider adoption of such crops as sugar cane, rice, citrus fruit, cotton and vegetables.

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Sweetening the pill of EU sugar reform

Summary

Just as European Union sugar producers are obliged to come to terms with lower subsidies in the wake of WTO stipulations, the White Knight of biofuels provides them with some fresh options for maintaining output and incomes. As independent consultant Bill Lavers reports, this is good news for European fertilizer suppliers too.

Abstract

Following a ruling by the World Trade Organisation (WTO) in April 2005 that restricted the export of subsidised EU sugar in world markets from 2006, the EU’s Council of Ministers agreed in November 2005 the broad framework for reforms to the Community’s sugar regime. Some would say that reforms to the EU’s sugar sector – which has been subsidising the production and processing of beet sugar for decades – were long overdue, the regime having escaped previous major reforms to the Common Agricultural Policy (CAP) that have already brought other sectors (such as oilseeds and cereals) into line with WTO rules. Aimed at limiting subsidised production for export, the reforms bring radical changes that challenge all producers, from the weakest to the strongest.

The first effects are being felt with this year’s (2006) harvests. The reforms cover the period to 2014/15 and stipulate progressive cuts in the support prices for both sugar beet and the white sugar produced from it. White sugar support prices are set to be reduced by 36 % over four years, while beet prices will be reduced by 40 % over the same period. At the same time, a fairly elaborate production quota system will be simplified, and the overall production quotas will be substantially reduced, again by 30-40 %, on a similar progressive basis.

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Introducing MacGregor Bulk AB

Summary

Enhancing efficiency in the bulk handling of fertilizers and associated raw materials has been the remit of several specialist engineering companies. One such company has been BMH Marine, which has supplied ship loaders and unloaders to many fertilizer companies around the world. Recently, BMH Marine joined forces with the long-established MacGregor Group, creating a major force in the bulk handling sector.

Abstract

On 31 July 2006, Cargotec – a division of the MacGregor Group – acquired the Swedish company, BMH Marine AB. The latter company is well known as a supplier of handling equipment for bulk terminals and shipboard self-unloaders, many of which have recently been installed for use in the fertilizer industry. The acquisition considerably extends MacGregor’s portfolio, which reflects over 70 years of experience in providing a full range of engineering services to ship­owners, ship operators, shipbuilders and others involved in the marine industry. By bringing BMH Marine into the fold, the Mac­Gregor Group enhances its position within the dry bulk handling sector. As a result, BMH Marine is changing its name to Mac­Gregor Bulk AB: the well-known brand names of Nordströms (covering ship self-unloading systems) and Siwertell (port terminals) will be retained. In 2006, BMH Marine reported estimated net sales of m70 million, almost half of which were recorded in Asia.

The Swedish company makes an excellent fit within the MacGregor Group. Recognising the shipping business’s primary need for fast, safe and profitable transportation of cargoes by sea from one point on the globe to another, MacGregor offers integrated cargo flow systems which optimise the function of a specific ship type. This is done by harmonising the basic cargo flow functions of access, stowage, care and handling. This in turn is the key to optimising a vessel’s profitability.

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FAI accentuates the positives

Summary

David Hayes, Asia Correspondent, recently visited the Fertiliser Association of India (FAI) in Delhi to discuss the latest trends in production and consumption. Given the complexities of a market which remains heavily subsidised and regulated, the picture is a reasonably encouraging one – as long as India can ensure the security of its supplies of energy in the longer term.

Abstract

Fertilizer consumption has shown a strong increase in many parts of India during the past 18 months as farmers have raised their use of mineral fertilizers to take advantage of improved seasonal weather conditions and plentiful, widespread monsoon rainfall. Domestic fertilizer production has been unable to keep pace with rising nutrient demand, however, and imports have consequently surged, particularly of urea and DAP.

“This year has seen an extremely good demand for fertilizer. There has been good rainfall and proper rain distribution,” commented a spokesman at the Fertiliser Association of India (FAI) in New Delhi. “June to September each year should have 70 % of the annual rainfall which is crucial for agriculture, especially for the first crop of the year, and to feed irrigation channels. There has been a sharp increase in fertilizer consumption in 2005 and 2006. We are expecting 21 million tonnes of consumption when results are confirmed for 2005/06, which should make it a record year.”

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Back in the fold

Summary

Libya's two decades of political and economic isolation have ended, and the country is again attracting overseas investment. Can Libya's indigenous fertilizer industry regain its momentum?

Abstract

Oil is the backbone of the Libyan economy, accounting for approximately 95 % of export earnings, 75 % of government revenues and 30 % of the gross domestic product (GDP). The government dominates Libya’s socialist-oriented economy. Libya suffered the status of international pariah from the mid-1980s until recently, attracting sanctions from the United Nations and the United States, thus starving the country of foreign investment funds. Although the United Nations’ sanctions were suspended in 1999, the United States continued to maintain the Iran and Libya Sanctions Act (ILSA), which capped the amount any foreign company could invest yearly in Libya to just $ 20 million. This barrier was eventually lifted in May 2006 after the United States removed Libya from its list of states that sponsor terrorism, so that Libya can finally enjoy normal economic relations with the rest of the world. Several major international oil companies have already become involved in exploring new oil and gas resources.

Libya’s downstream fertilizer industry may also benefit from a revival in investment. It too has faced sanctions for several years, having attracted anti-dumping duties on its exports of urea. However, relief is at hand, as the European Commission an­nounced that its anti-dumping duties on Libyan urea would expire on 20 January 2007.

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The megaphosphate plant is coming

Summary

A look at conceptual designs for large single-train phosphoric acid and DAP plants, using proven technology and equipment. A pipedream or soon to be a reality?

Abstract

At Phosphates 2006, organised by British Sulphur Events, Marten Walters of Jacobs Engineering presented conceptual designs for large single-train phosphoric acid and DAP plants. The 5,000 t/d P2O5 phosphoric acid and 5,000 t/d DAP plant will soon be here, he stated. (MegaPhosphate – Large-Scale Phos­phoric Acid and Granulation Plants, Marten D. Walters, David M. Ivell and Joseph I. Bull, Jacobs Engineering. Paper presented at Phosphates 2006, Brussels, April 2006.) Indeed, Marten Walters be­lieves that there is no practical physical limit in the size of a single-train phosphoric acid or DAP plant. The only notable constraints may be ­logistical or economical. In normal circumstances, however, the case for a large plant becomes compelling, and a 5,000 t/d P2O5 plant is readily achievable with existing technology and proven size equipment or equipment that will be available soon.

Fig. 1 shows the progress that has been made in raising phosphoric acid capacities in the past half-century. It was only in the mid-1970s that the 1,000 t/d P2O5 upper limit was breached, and for the following two decades, a maximum capacity of around 1,350 t/d P2O5 remained the norm. The bar was raised very dramatically in 2000, when Jacobs Engineering designed the 2,650 t/d P2O5 phosphoric acid plant for Oswal Chemicals and Fertilizers at Paradeep, which at the time was the world’s largest. The plant was subsequently expanded to 3,200 t/d with the addition of a vacuum cooler and a belt filter.

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High hopes around the world

Summary

Several long-mooted potash projects are making progress towards fulfilment while others have been announced more recently. What are the prospects for Thailand, Iran and several African countries for joining the ranks of world potash producers in the foreseeable future?

Abstract

World supply of potash is concentrated among the well-established potash producers of Europe, North America and the Middle East. As global demand for potash is forecast to grow at just over 3 %/year during the next five years, to reach 35.3 million tonnes K2O by 2010, these producers believe that they are well placed to meet foreseeable levels of demand. Indeed, there is currently a supply/demand surplus for potash. Several debottlenecking and expansion projects among the established potash producers will augment global capacity, which IFA forecasts will increase from 64.3 million tonnes KCl in 2005 to 71.3 million tonnes KCl by 2010. IFA estimates that world potash supply will reach 41.4 million tonnes K2O by 2010, compared with 37.5 million tonnes K2O in 2006. (Global Fertilizers and Raw Materials Supply and Supply/Demand Balances: 2006-2010, Michel Prud’homme, IFA Annual Confer­ence, Cape Town, June 2006.)

Much of this new potash capacity will be export oriented and will find a ready market in the short term. However, IFA expects that the supply surplus will increase after 2010, when it is forecast to total 6.2 million tonnes K2O. This marks the period when further new potash projects are likely to come on stream, notably in China, Argentina and perhaps Thailand. Iran and Congo could well also join the ranks of potash producers, while notable new projects are being evaluated in Russia, Canada and the United States. What is the likelihood of these various projects coming on stream, and how could they affect global patterns of potash trade?

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Uganda gets back on the phosphate map

Summary

Uganda has extensive phosphate resources which have largely yet to be exploited. Since a relatively small mining and SSP production operation ceased in 1978, the country's phosphates have lain undisturbed. However, Uganda-based Nilefos Minerals, part of the Madhvani International Group, is progressing an apatite mining project at Sukulu, the country's largest deposit, and has plans for downstream processing facilities. The group has been involved with the project since 1998. Canmin Resources, part of Canada's IBI Corp. is producing vermiculite at the smaller Busumbu deposit and recently began exports of this phosphate-containing material for its nutrient content. Lynda Davies looks at the history of Uganda's phosphate sector as well as recent developments.

Abstract

Uganda has extensive phosphate resources. The largest deposit lies in the east of the country at Su­kulu, some 6 km south west of the town of Tororo. Total reserves of the residual phosphate at Sukulu have been calculated at 230 million tonnes, averaging 12.8 % P2O5. A smaller resource is located at Bus­umbu Hill, about 10 km west of the Kenyan border and approximately 30 km north of Tororo. There are smaller bodies of secondary phosphates in the west of the country.

The Sukulu phosphate resources in particular have been investigated intensively over the years and the residual soils at Sukulu and at Busumbu both have been mined in the past, at Sukulu between 1962 and 1978 (Fig. 1), and at Busumbu be­tween 1944 and 1963. Phosphate mining was initiated at Sukulu by the Ugandan Devel­opment Corporation and its subsidiary, Tororo Industrial Chemicals and Fertilizer Company (TICAF), established in 1963. TICAF mined the apatite-pyro­chlore bearing residual soils of the North Valley, which grade around 13 % P2O5. The apatite was recovered through grinding and magnetic separation, followed by flotation, to create a 40-42 % P2O5 concentrate. This concentrate was all used for the production of single superphosphate (SSP) onsite.

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