IFA '07: Biofuel demand to stimulate fertilizer use

22 May 2007 09:28  [Source: ICIS news]

ISTANBUL (ICIS news)--A sharp rise in fertilizer consumption is expected in 2007-08, with the US spearheading growth, the International Fertilizer Industry Association (IFA) said on Tuesday.

This would be due mainly to the anticipated demand for corn for production of bioethanol, according to a preliminary report issued by the IFA Task Force on Bioenergy, at an annual meeting which ends on Wednesday.

Short-term fertilizer consumption growth could also be seen in Argentina and Brazil, due to possibly attractive cereal and soybean prices.

In Brazil, increased demand for sugar cane for bioethanol production should stimulate fertilizer consumption, the report said.

In the European Union, the rapeseed area was also forecast to increase, thus mitigating the longer-term trend of declining fertilizer consumption in the mature European market.

Other notable areas that could see an increase in fertilizer consumption included South Africa, thanks to increased maize production, and Indonesia and Malaysia, due to increased demand for palm oil, the report added.

Over the medium term however, targets set by national governments for the incorporation of biofuels in transport fuels will start to come into play, particularly in China, India and OECD countries, the IFA said.

It was difficult, however, to see how these countries could meet these targets from their own national production of biofuels, the report said, adding that they would have to import feedstocks and/or biofuels in order to meet these objectives.

Protectionist tariffs on biofuels importation would have to be reduced, it said.

By: Mike Nash
+44 20 8652 3214

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