Latin America Fertilizer Demand GPCA Douglas Hoadley September 2017
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Global nitrogen demand 40 35 million nutrient tonnes of N Latin America accounts for about 8% of global N demand 30 25 20 15 10 5 0 East Asia Europe & CIS South Asia North America Latin America South-East Asia Africa Middle East Oceania Caribbean 3
Global phosphate demand 14 12 million nutrient tonnes of P Latin America accounts for about 18% of global P demand 10 8 6 4 2 0 East Asia Europe & CIS Latin America North America South Asia South-East Asia Africa Oceania Middle East 4
Latin American fertilizer demand 10 Nutrient demand: million tonnes 9 8 7 6 5 4 3 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018* N P 5
Key consumers of nitrogen in Latin America 4.5 million nutrient tonnes of N 4.0 3.5 3.0 2.5 These countries account for 94% of nitrogen demand in Latin America. Brazil is the largest consumer comprising of 50% of total consumption. 2.0 1.5 1.0 0.5 0.0 Brazil Mexico Argentina Colombia Venezuela Peru Chile Guatemala Ecuador Uruguay Average 2015-17 6
Key consumers of phosphates in Latin America 6.0 5.0 4.0 million nutrient tonnes of P Phosphate fertilizer demand in Latin America is more concentrated than nitrogen, with Brazil accounting for approximately 75% of total consumption. 3.0 2.0 1.0 0.0 Brazil Argentina Mexico Paraguay Colombia Uruguay Chile Peru Venezuela Ecuador Average 2015-17 7
Brazil is an agricultural powerhouse Availability of arable land, regular rainfall and suitable climatic conditions. World s largest producer of sugar, the second biggest producer of soybeans. Total fertilizer demand (N, P and K) has grown at approximately 7.1% per annum between 2008-2017. A majority of the expansion has occurred in the Cerrado, a vast tropical savannah region in centre-west Brazil covering states such as Goias, Mato Grosso and Mato Grosso do Sul. Crop expansion has been driven by the conversion of pasture lands in the Cerrado from livestock to soybeans and corn. Brazilian fertilizer demand is mainly met through imports 8
Brazil fertilizer demand dynamics 16 Nutrient demand: million nutrient tonnes 14 12 10 8 6 4 2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018* N P K 9
Brazil major crop area forecast Harvested area, million ha 40 30 Brazil is forecast to produce record levels of corn and soybean 2017 area: 34.8m ha 20 16.9m ha 10 9.4m ha 2.1m ha 0 2007 2009 2011 2013 2015 2017 2019 2021 Corn Soybeans Wheat Sugar 10
Brazil s nitrogen demand by crop N consumption, million tonnes 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 11% 13% 14% 29% 27% 25% 27% 31% 31% 2012 2017 2022 Corn Sugar F&V Others 11
Currently, Brazil is slightly dry which may delay soybean plantings Rainfall Anomaly Dry Wet <0.4 1.0 >1.6 Sugar production area Corn production area Soybean production area 0.8 1.2 12
Brazil s Cerrado region is large scale agriculture 13
Brazil soybean area by region Harvested area, million ha 16 14 12 10 8 6 4 2 0 1978 1982 1987 1992 1997 2002 2007 2012 2017* North Northeast Centre-West Southeast South 14
Brazil soybean and corn area dynamics 40 Harvested area, million ha 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* Full season corn Safrinha corn Soyabean 15
Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Urea Barter Ratio Number 60kg corn bags/1 tonne urea 60 LESS favourable for fertilizer sales 50 40 30 20 10 MORE favourable for fertilizer sales 16
Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 MAP Barter Ratio Number 60kg soybean bags/1 tonne MAP 35 LESS favourable for fertilizer sales 25 15 MORE favourable for fertilizer sales 5 17
Global Urea Imports million tonnes 12 10 8 Latin America accounts for about 24% of global imports 6 4 2 0 Latin America South Asia Europe & CIS South-East Asia North America Middle East Africa Oceania East Asia 18
Key importers of urea in Latin America million tonnes 6.0 5.0 4.0 These countries account for 96% of nitrogen imports in Latin America. Brazil is the largest consumer comprising 46% of total imports. 3.0 2.0 1.0 0.0 Brazil Mexico Colombia Peru Chile Ecuador Guatemala Argentina Uruguay Honduras 19
Middle East Urea exports year-to-date, Brazil largest destination in 2017 3 2.5 2 1.5 1 0.5 0 USA Brazil India Thailand 2016 2017 20
Global DAP and MAP imports 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 million nutrient tonnes of P2O5 Latin America accounts for about 31% of global DAP and MAP imports 0.0 Latin America South Asia Europe & CIS North America Oceania Africa Middle East East Asia South-East Asia 21
Key importers of phosphates in Latin America 3.0 2.5 2.0 million nutrient tonnes of P2O5 DAP/MAP imports in Latin America are more concentrated than nitrogen, with Brazil accounting for approximately 70%. 1.5 1.0 0.5 0.0 Brazil Argentina Mexico Colombia Uruguay Peru Chile Ecuador Honduras Guatemala 22
Conclusions Latin America accounts for 8% of global nitrogen demand and 18% of phosphates demand. Brazil, Argentina, Mexico, Colombia are the largest consumers in the region; Brazil alone accounts for 50% of the region s nitrogen demand and 75% of phosphates. Brazil is a large market with high growth rates as soybeans and corn plantings continue to increase. Most of this region s demand is met by imports and Latin America accounts for 24% of global nitrogen imports and 31% of phosphates imports. The Middle East has shifted some urea exports from the US to Brazil over the last year. 23
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