FERTILIZER DEMAND
Following a firm increase in 2016/17, world demand is anticipated to grow modestly in 2017/18 Owing to favourable weather following an exceptionally strong El Nino event and prospects for improving returns from farming in countries with supportive exchange rates, world fertilizer demand grew firmly in 2016/17 (+2.4%) to an estimated 186 Mt. Demand for P and K is anticipated to expand faster than that for N.
The outlook for 2017/18 is influenced by ample inventories and low prices for most crops; improving economic prospects in developed countries, Russia, Brazil and Sub-Saharan Africa; and growing political uncertainty in several large fertilizer-consuming markets. World fertilizer demand is forecast to grow modestly, by 1.2%, to 188 Mt. K demand would grow most rapidly, owing to good prospects in China, India, Brazil and Indonesia, and a rebound in Belarus. N and P demand would expand more moderately, as drops in Turkey, Pakistan and Germany partly offset increases elsewhere.
Global fertilizer demand forecast to remain slightly below 200 Mt by 2021/22
The medium-term outlook for world agriculture remains broadly unchanged compared to last year, with expectations of relatively flat real prices for most agricultural commodities, reflecting prospects for ample supplies and weakening demand growth.
In the absence of major weather-related shocks, or economic or policy changes in the main fertilizer-consuming markets, the current context supports modest fertilizer demand growth prospects in the next five years.
Under the baseline scenario, global fertilizer demand is seen as growing on average by 1.5% per annum (p.a.) between the base year (average of the three-year period 2014/15 to 2016/17) and 2021/22.1 Aggregate world demand is projected to reach 199 Mt at the end of the outlook period. Reflecting the progressive adoption by farmers of best management practices that result in N use efficiency improvements, as well as the increasing recycling of organic nutrient sources, K demand is forecast to grow more firmly (2.1% p.a.) than demand for P (1.5% p.a.) and N (1.2% p.a.).
The highest growth rate is anticipated in Africa, followed by Eastern Europe & Central Asia and Latin America. These three regions have the greatest agricultural growth potential in the decade to come. Demand in South Asia is seen as rising below the historical trend, as neemcoated urea, upscaling of Direct Benefit Transfer to farmers, and rapid adoption of water-soluble fertilizers will influence the outlook. West Asian demand growth is very speculative, as it is highly dependent on the evolution of regional geopolitical tensions. In East Asia fertilizer usage is forecast to expand modestly, as Chinese N and P demand is seen as reaching a plateau during the outlook period. Demand growth in developed regions is seen as weak, with better prospects in Oceania than in North America and Western & Central Europe. In volume terms, Latin America, South Asia and East Asia together would account for three-fourths of the projected increase in global fertilizer demand in the next five years. - IFA -