IPNI Southeast Asia Program Fertilizer supply vis-à-vis crop nutrient demands A brief analyses of key agricultural commodities in Southeast Asia Thomas Oberthür & Tan Mei Shih IPNI Southeast Asia. IPNI Southeast Asia for
IPNI Southeast Asia Program 1. Market Typology 2. Crops & Fertilizers 3. Market Development Thomas Oberthür & Tan Mei Shih IPNI Southeast Asia. IPNI IPNI Southeast Asia Program for Argus NPK Webinar Fertilizers for Member Vietnam Companies 2017 08 June 2016, Penang
1 Market Typology
Typology of Markets Agriculture value added per worker (US$) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Exit Ag Subsistence 0 20M 40M 60M 80M 100M 120M 140M 160M 180M Production of all main crops in the SEA region (million tons)
Typology of Markets Agriculture value added per worker (US$) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Exit Ag 1961 2015 0 20M 40M 60M 80M 100M 120M 140M 160M 180M Production of all main crops in the SEA region (million tons)
Typology of Markets Agriculture value added per worker (US$) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Exit Ag 1961 2015 Malaysia 0 20M 40M 60M 80M 100M 120M 140M 160M 180M Production of all main crops in the SEA region (million tons)
Typology of Markets Agriculture value added per worker (US$) 1,200 1,100 1,000 900 800 700 600 500 400 300 200 Exit Ag Lao PDR Cambodia Philippines Vietnam Thailand Indonesia 0 20M 40M 60M 80M 100M 120M 140M 160M 180M Production of all main crops in the SEA region (million tons)
Typology of Markets Agriculture value added per worker (US$) 1,200 1,100 1,000 900 800 700 600 500 400 300 200 Exit Ag Swing voters Value crops Food crops Subsistence 0 20M 40M 60M 80M 100M 120M 140M 160M 180M Production of all main crops in the SEA region (million tons)
2 Crops & Fertilizers
Key Crops in SEA
Nutrient Removals & Demand (tons) APPROACH USDA data (2016) on production (except rubber, FAO 2014) Nutrient removal values (mainly IPNI, with literature) Fertilizer Use Efficiency (literature or IPNI, +15% in 2025)) Compound Annual Growth Rate (based on 20 years) Nutrient Ratios (FAO data)
Nutrient Removals & Demand (tons) RICE Nutrient removed 2016 2025 N P K Mg 1,835,201 351,310 435,205 174,781 Fertilizer requirement 2016 2025 N P K Mg 4,588,001 1,405,239 1,088,012 436,953
Nutrient Removals & Demand (tons) RICE Nutrient removed 2016 2025 N P K Mg N P K Mg 1,835,201 351,310 435,205 174,781 2,057,192 393,805 487,848 195,923 Fertilizer requirement 2016 2025 N P K Mg N P K Mg 4,588,001 1,405,239 1,088,012 436,953 4,472,157 1,369,757 1,060,539 425,920
Nutrient Removals & Demand (tons) OIL PALM Nutrient removed 2016 2025 N P K Mg 826,608 96,142 986,530 143,092 Fertilizer requirement 2016 2025 N P K Mg 1,777,651 211,302 2,055,270 539,969
Nutrient Removals & Demand (tons) OIL PALM Nutrient removed 2016 2025 N P K Mg N P K Mg 826,608 96,142 986,530 143,092 1,211,323 143,311 1,464,285 207,297 Fertilizer requirement 2016 2025 N P K Mg N P K Mg 1,777,651 211,302 2,055,270 539,969 2,265,213 273,886 2,652,690 680,219
Nutrient Removals & Demand (tons) MAIZE Nutrient removed 2016 2025 N P K Mg 373,476 65,358 112,043 NA Fertilizer requirement 2016 2025 N P K Mg 933,690 261,433 280,107 NA
Nutrient Removals & Demand (tons) MAIZE Nutrient removed 2016 2025 N P K Mg N P K Mg 373,476 65,358 112,043 NA 447,465 78,306 134,239 NA Fertilizer requirement 2016 2025 N P K Mg N P K Mg 933,690 261,433 280,107 NA 972,750 272,369 291,824 NA
Nutrient Removals & Demand (tons) RUBBER Nutrient removed 2014 2025 N P K Mg 199,910 49,977 249,887 49,977 Fertilizer requirement 2014 2025 N P K Mg 309,745 475,749 522,230 155,523
Nutrient Removals & Demand (tons) RUBBER Nutrient removed 2014 2025 N P K Mg N P K Mg 199,910 49,977 249,887 49,977 240,895 60,224 301,118 60,224 Fertilizer requirement 2014 2025 N P K Mg N P K Mg 309,745 475,749 522,230 155,523 324,564 498,275 547,214 162,939
Nutrient Removals & Demand (tons) SUGARCANE Nutrient removed 2016 2025 N P K Mg 156,467 28,448 156,467 42,673 Fertilizer requirement 2016 2025 N P K Mg 391,167 113,794 391,167 106,682
Nutrient Removals & Demand (tons) SUGARCANE Nutrient removed 2016 2025 N P K Mg N P K Mg 156,467 28,448 156,467 42,673 220,956 40,174 220,956 60,261 Fertilizer requirement 2016 2025 N P K Mg N P K Mg 391,167 113,794 391,167 106,682 480,339 139,736 480,339 131,002
Nutrient Removal Ratios, P 2 O 5 :N and K 2 O:N
Supply Ratios, Malaysia, Value Crops 1.80 1.60 1.40 MALAYSIA 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Supply Ratios, Myanmar, Food Crops 1.80 1.60 1.40 MYANMAR 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Supply Ratios, Indonesia, Food Crops 1.80 1.60 1.40 INDONESIA 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Supply Ratios, Indonesia, Value Crops 1.80 1.60 1.40 INDONESIA 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Supply Ratios, Philippines, Food & Value Crops 1.80 1.60 1.40 PHILIPPINES 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Supply Ratios, Vietnam, Food & Value Crops 1.80 1.60 1.40 VIETNAM 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Supply Ratios, Thailand, Food & Value Crops 1.80 1.60 1.40 THAILAND 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
3 Market Development
Opportunities Typology Exiting agriculture Food sufficiency Value products Swing voters Significance for fertilizer industry Investment phase passing. Mature market may not extend beyond the next oil palm crop cycle. Only significant new sector: oil palm smallholders. Continued demand but low cash availability sets limit for new products. New geographical markets emerging. Smallholder targeted approaches required. High potential in midterm but dependent on knowledge driven, innovative supply chains. Strong growth options, but highly uncertain until institutions are in place. Smallholder targeted approaches required.
Opportunities Closing NPK gaps Balanced products Attractiveness Specialty products Feasibility
Opportunities Exit Ag Situation Attractiveness Feasibility
Opportunities Value Crops Attractiveness Feasibility
Opportunities Food Crops Attractiveness Feasibility (certainty of benefit) Feasibility
Putting it all together A commitment to longterm investment, based on detailed and secure analysis of market, supply and growing conditions. Growing knowledge amongst farmers and dealers to maintain trust in the product and support farmers skill to manage the product within more complex farming systems. Fertilizer is an accepted need for high production. Translating general belief into targeted ground action is complex. Identifying the right fertilizer and the right knowledge for an evolving system is critical. Increasing reengineering of supply chains to move beyond standard fertilizer products towards targeted inputs that generate known value. Ensure confidence in investment instruments that work for a region. Develop new supply chain partnerships to drive knowledge based fertilizer management.
IPNI Southeast Asia Program Fertilizer supply vis-à-vis crop nutrient demands Questions: toberthur@ipni.net
Opportunities Typology Exiting agriculture Food sufficiency Value products Swing voters Malaysia: Indonesia: Indonesia: Myanmar: Future market development investment Oil palm smallholder systems Improved nutrient sources Severe imbalances in in rice, maize and cassava fertilization Significant N-P-K gap in oil palm systems Severe imbalances and NPK gaps in oil palm smallholder systems Imbalances and nutrient gaps in in rice (maize, pulses) fertilization Niches for high density products Institutional uncertainty
Opportunities Typology Exiting agriculture Food sufficiency Value products Swing voters Future market development investment Vietnam: Right rate opportunities Thailand: Right source and rate opportunities Knowledge development opportunities
Geographic Opportunities Typology Exiting agriculture Food sufficiency Value products Swing voters Future market development investment Philippines: Significant K gaps in rice, maize and cassava Large nutrient imbalances Philippines: Various high value crops with potential Knowledge development required
Buyers Risks FUEL Certainty of Benefit
Buyers Risks SEED FUEL Certainty of Benefit
Buyers Risks FERTILIZER SEED FUEL Certainty of Benefit
Buyers Risks METRIC Uncertainty about the precision of input to achieve an outcome. Cook et al. Better Crops 97, 17-20 (2013)
Buyers Risks METRIC Uncertainty about the precision of input to achieve an outcome. TEMPORAL Uncertainty related to past / future events Cook et al. Better Crops 97, 17-20 (2013)
Buyers Risks METRIC Uncertainty about the precision of input to achieve an outcome. TEMPORAL Uncertainty related to past / future events STRUCTURAL Uncertainty about impact of other internal factors relevant to the decision Cook et al. Better Crops 97, 17-20 (2013)
Buyers Risks METRIC Uncertainty about the precision of input to achieve an outcome. TRANSLATIONAL Uncertainty related to issues external to the decision TEMPORAL Uncertainty related to past / future events STRUCTURAL Uncertainty about impact of other internal factors relevant to the decision Cook et al. Better Crops 97, 17-20 (2013)