IFA '08: Ferts not to blame for high food prices

20 May 2008 13:43  [Source: ICIS news]

(Updates with Enger's first name in first paragraph and further detail in fifth paragraph)

VIENNA (ICIS news)--Historically high fertilizer prices are not to blame for global food price rises but are a function of a functioning supply and demand-led market, bolstered by high energy and feedstock costs, said IFA president Thorleif Enger on Tuesday.

Addressing the 76th International Fertilizer Industry Association (IFA) conference in Vienna, Enger said that high food costs were also partly caused by decades of under-investment in the global agricultural sector.

“Food and fertilizer prices have been relatively flat in real terms for the last 15 years,” he said.

“This, combined with government complacency has led to limited investment in agriculture, and consequently fertilizer capacity.

“Increasing household incomes in China and the rise of biofuel demand for fertilizers had raised demand for fertilizers faster than predicted,” added Enger, who is also CEO of chemicals and fertilizer company Yara.

What was needed from the fertilizer industry in response to such unprecedented times, Enger said, was resolve to overcome production bottlenecks and maximise output and encouragement of greater fertilizer efficiency usage.

“Otherwise, the supply side will remain tight until this situation was resolved,” Enger said.

The IFA conference runs from 19-21 May.

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By: Mike Nash
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