Global ferts supply to outstrip demand till 2012

26 February 2008 12:27  [Source: ICIS news]

MUMBAI (ICIS news)--Global fertilizer production will outstrip demand over the next five years and support higher levels of food and biofuel production, the Food and Agriculture Organisation (FAO) of the UN said on Tuesday.

In its outlook report, the Rome-based FAO estimated global supply of nitrogen, phosphate and potash nutrients to grow at an annual rate of 3% or 34m tonnes to 241m tonnes in 2011-2012 from 206.5m tonnes in 2007-2008.

This would be comfortably sufficient to cover annual demand growth of 1.9%, from 197m tonnes/year currently to 216m tonnes in 2011-2012, it added.

Global nitrogen supply is forecast to rise by 23.1m tonnes by 2011-2012, phosphate fertilizer by 6.3m tonnes and potash by 4.9m tonnes, the FAO said.

"Africa will remain a major phosphate exporter and increase nitrogen exports while importing all of its potash," it added.

Its consumption would largely be restricted to 10 countries, primarily Egypt, South Africa and Morocco, it said.

North America is expected to continue being a net nitrogen importer and a primary supplier of potash, the FAO added. However, the region will move into increasing phosphate deficit.

Asia is projected to produce a rapidly increasing surplus of nitrogen, but will continue to import phosphate and potash, it said.

"High commodity prices experienced over recent years led to increased production and correspondingly to greater fertilizer use," said FAO fertilizer expert Jan Poulisse.

This has led to tight markets and higher fertilizer prices, he added.

"While it is expected that the demand for basic food crops, fruits and vegetables, for animal products and for biofuel crops is likely to remain strong, we expect fertilizer supply to grow sufficiently to meet higher consumption," Poulisse said.

By: Divya Chowdhury
+65 6780 4359

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