IFA Medium-Term Fertilizer Outlook

Transcription

1 IFA Medium-Term Fertilizer Outlook Olivier Rousseau IFA Secretariat Afcome 2015 Reims, France October 21 st - 23 rd 2015

2 Outlook for World Agriculture and Fertilizer Demand Economic and policy context Agricultural prospects Fertilizer demand forecasts (baseline scenario)

3 A Number of Red Lights and Green Lights Low crop prices Decreasing support to biofuels China zero-growth fertilizer consumption policy More than half of the market is now mature India s fertilizer subsidy policy Global economic growth seen rebounding Ag markets forecast to tighten Strong prospects for Sub-Saharan Africa

4 Economic Activity Recovers Progressively but Remains Fragile GDP Growth (%) Short term +3.5% in 2015 Progressive recovery in advanced economies +3.8% in 2016 Rebound in emerging & developing economies Source: IMF Medium term ~4% annually Activity strengthens in emerging & developing economies Slowdown in China (6-7% annually) India: +8% annually

5 Policy Developments Greatly Influence the Outlook Developed Countries More emphasis on nutrient use efficiency Food industry sustainability standards China Fertilizer demand growth capped to 1% in Zero growth thereafter Sub-Saharan Africa More countries subsidize fertilizers Greater support to agriculture India Uncertainty re evolution of fertilizer subsidy policies Impact of neem-coated urea?

6 Favourable Weather in the Main Cereal and Oilseed Production Areas Crop Conditions in AMIS Countries (as of end May 2015) Source: AMIS El Niño started in April It may last until the beginning of 2016 Concerns over a possible delayed and/or below-average southwest monsoon in India

7 World Cereal Production Seen Dropping Modestly in World Cereal Production and Utilization (Mt) Production Utilization 2015 output close to 2014 record -26 Mt (FA0) -9 Mt (USDA) Source: FAO Demand driven by feed and food uses Anticipated small deficit 4 Mt (FA0) 8 Mt (USDA) Large inventories and export availabilities

8 Agricultural Commodity Prices Are Low Compared to Recent History Relative Price Evolution from January 2006 to May 2015 (Jan 2006 = 100) Wheat Maize Rice Soybean Prospects for lower yields and return Commercial farmers tend to reduce fertilizer application rates P an K consumption likely more affected Impact on: o North Am and West Europe in 2014/15 o Lat Am and Oceania in

9 Agricultural Markets Seen Tightening from 2016/17 Production Expected to expand from 2016/17 Higher growth rates for soybean and maize vs. wheat and rice Gains mostly through yield improvements Area expansion in Brazil, Indonesia, Russia Aggregate World Supply and Demand for Wheat + Coarse Grains (Mt) Utilization Larger feed uses in developed and emerging economies and food uses in least developed countries Industrial uses to grow at slow pace vs. previous decade (little growth in cerealbased ethanol) Source: IGC

10 Agricultural Markets Seen Tightening from 2016/17 Inventories High starting point in 2014/15 Inventories and stock-to-use ratios projected to contract for all commodities Largest drops anticipated for maize, soybean and cotton Stock-to-Use Ratio (%) Crop Prices International prices projected to firm over the outlook Would remain low in the next 2-3 years in view of the large availabilities Source: IGC

11 Demand Drops in North America, Stagnates in EECA and Rises Elsewhere Short-term Prospects for Total Fertilizer Demand between 2012/13 and 2015/16 (Mt nutrients) East Asia South Asia North America Lat. Am. & Carib. W. & C. Europe E. Eur. & C. Asia Africa West Asia Oceania Variation in 2013/14 Variation in 2014/15 Variation in 2015/16-1,5-1,0-0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0

12 Different Trends Between Nutrients Annual Growth (Mt nutrients) Relative Growth (2012/13 = 100) Variation in 2013/14 Variation in 2014/15 Variation in 2015/ N P205 K20 K20 1,2 1,3 0, P205-1,3 1,0 0, N 2,3 1,4 1, Source: IFA Agriculture

13 Global Fertilizer Demand Increases Steadily Since 2009/ Short-term Forecast (Mt nutrients) 200 K20 P N 27,2 38,8 29,1 38,5 23,2 33,9 23,6 37,5 27,5 40,5 28,2 29,1 30, ,5 31,8 41,6 41,6 40,3 41,3 41,8 96,9 100,8 98,3 102,5 104,5 107,6 108,1 110,4 111,8 112,9 Change 2013/ / /16 N +2.1% +1.3% +1.0% P 2 O 5-3.2% +2.5% +1.1% K 2 O +4.0% +4.2% +0.8% Total +1.2% +2.0% +1.0% Source: IFA Agriculture

14 India, Brazil and the Rest of the World Drive Future Growth Aggregate Fertilizer Demand (Mt nutrients) Source: IFA Agriculture China India USA EU Brazil ROW Marginal growth in the EU and the US Demand reaches a plateau in China +1% p.a. in East Asia More than half of the world market is mature Robust rebound in India but Steady growth in Brazil Lat Am equals N. Am in 2019/20 Firm growth in the ROW Africa 4 th contributor in volume Sub-Saharan Africa (without South Africa) is the fastest growing market (>6% p.a.)

15 Regional Aggregate Fertilizer Demand Medium-term Outlook (Mt N) East Asia 25% South Asia 27% North America Lat. Am. & Carib. W. & C. Europe E. Eur. & C. Asia 23% Top-3 = 75% Africa 9% West Asia Oceania Av. 2012/13 to 2014/15 Variation in 2019/ Source: IFA Agriculture

16 Global Fertilizer Demand Seen Reaching 200 Mt in 2019/20 Medium-term Forecast (Mt nutrients) ,2 38,8 K20 P205 N 29,1 38,5 23,2 33,9 23,6 37,5 27,5 40,5 Base year 28,2 29,1 30,2 31,5 31,8 41,6 41,6 40,3 41,3 41,8 42,9 44,0 44,9 45,7 96,9 100,8 98,3 102,5 104,5 107,6 108,1 110,4 111,8 112,9 114,7 116,4 117,8 119,2 32, ,7 34,5 35,3 Average Annual Change Base Year 2019/20 N +1.3% p.a. P 2 O % p.a. K 2 O +2.6% p.a. Total +1.7% p.a.

17 Key Take Home Messages Agricultural situation o Bumper crop in perspective for 3 rd consecutive year high inventories and low crop prices o Agricultural commodity markets are anticipated to tighten in the next five years Fertilizer demand o Demand in 2015 is impacted by low crop prices o World demand is hit by China capping domestic demand growth o Big uncertainty about prospects in India o World demand reaches 200 Mt in 2019/20

18 THANK YOU FOR YOUR ATTENTION