Fertilizer industry

Fertilizer industry 

Phosphate Rock Reserves

Morocco and Western Sahara, China, South Africa, Kazakhstan and the United States have the largest phosphate reserves, together accounting for 80% of world reserves (map 1).
Phosphate reserves are reserves of phosphate rock that can be economically extracted under current market conditions. 

Map 1. World map showing countries with major Phosphate Reserves, in billion tonnes

Figure 1. Phosphate Rock reserves by country (Mt)

Phosphate Rock production

Figure 2. Phosphate Rock Production by country (Mtpa)

Phosphate fertilizers production 

Map 1. World map showing P2O5 production & consumption, in million tonnes, in 2007

Source: IFA (2007)

Phosphate fertilizers are low value – high volume products and world trade is a relatively small part of world consumption/production, compared to other commodities. 
Major phosphate producers are usually located near sea ports or raw material sources. Major cost components of phosphate fertilizers are phosphate rock (phosphoric acid), sulphur and ammonia. Therefore, the location of phosphate fertilizer processing facilities becomes a logistical issue and depends on relative transportation costs of phosphate rock or phosphoric acid, sulphur and ammonia.

Phosphate fertilizers demand

Demand for phosphate fertilizers (usually measured in P2O5) has been rising steadily and is driven by growing demand for food from an increasing world population. There have been only two periods in the last 30 years when demand for phosphate fertilizers fell sharply: 

1991 -1995 Breakup of the Soviet Union in 1991

In 1989, the Soviet economy consumed 24 million tonnes (nutrient content) of NPK fertilizers, including 8.1 million tonnes of P2O5). After the collapse of the Soviet Union in 1991, demand for fertilizers in the Former Soviet Union (FSU) almost disappeared and has made a slow recovery. In 2007, FSU countries consumed 5.5 million tonnes (nutrient content) of NPK fertilizers, including 0.9 million tonnes P2O5). (Source: IFA)

2008 World financial crisis

Demand and prices for fertilizers followed the recent economic cycle and rose together with demand and prices for other commodities. In 2007 prices for phosphate fertilizers peaked reaching $1,200 per tonne of DAP. As a result of the credit crunch and liquidity crisis, phosphate market reacted by sharp fall in prices and decrease in demand & consumption. 

Global Phosphate Consumption (Mt, P2O5)

Source: IFA (2009)

At the end of 2009, the phosphate fertilizer market started to recover and this trend continues in 2010.