Global Trade of NPK Compounds

Current Situation and Trends

Qubec

presented by Joachim Felker President of fertiva GmbH, Germany IFA Production and International Trade Committee Conference October 2002
16-18 October 2002 Global Trade of NPK Compounds - Current Situation and Trends

Agenda

Development of the Complex Fertilizer Market in Western Europe Complex Fertilizers - Production & Consumption around the World World Trade of NPKs China - the Future Complex Fertilizer Market Summary

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Global Trade of NPK Compounds - Current Situation and Trends

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Topic of Interest

Complex Fertilizers: All nutrients in one grain

16-18 October 2002

Global Trade of NPK Compounds - Current Situation and Trends

History of NPK fertilizers

1913 start of the industrial ammonia production based on the Haber-Bosch-Synthesis at BASF Ludwigshafen 1926 start of the Nitrophoska production at BASF Ludwigshafen 1936 in Western Europe different companies start building up NPK plants
Mill. t N

4 3

1965-1975 in Western Europe production capacity rises from 1.9 Mill. to 4.0 Mill. t of nitrogen
16-18 October 2002

1975
2 1 0

1965
3

Global Trade of NPK Compounds - Current Situation and Trends

Market Share Development of Complex Fertilizers in Western Europe

40 35 30 25
%N

20 15 10 5 0 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002
4

Source: EFMA including blends and mixed granules

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Global Trade of NPK Compounds - Current Situation and Trends

Western Europe N-Fertilizer Capacities of Important Producers

Mill. t N
1,2 1,0 0,8 0,6 0,4 0,2
Norsk Hydro ICI Hell. Chem. ERT NET GP Nit. Fert. Phos. Fert Fertim. Quimig. CWH UKF SIR Hoechst Enfersa Windmill

1980

0,0

Gesa

Kemira

Carbo

Gardin.

Fisons

Esso

APC

Cros

Cofaz

Supra

BASF

4,0 3,0 2,0 1,0 0,0

Norsk Hydro DSM GP Fertiberia SKW Piesteritz Agrolinz Melamin Adubos de Portugal Kemira fertiva* Terra

2002

* incl. marketing capacity Bayer

16-18 October 2002

Global Trade of NPK Compounds - Current Situation and Trends

Sefanit.

Superf.

Nicas

Linz

A&W

Anic

NPK * Development Capacity Indices in the EFMA Countries

in %

100
Total N NPK

95 90 85 80 75 70 65 60

0 99 /0

97 /9

98 /9

95 /9

Source: Annual Report 2002 * excluding mixed granules

16-18 October 2002

90 /9

89 /9

91 /9

92 /9

Global Trade of NPK Compounds - Current Situation and Trends

94 /9

93 /9

96 /9

00 /0
6 7

Changes in the Western European Complex Fertilizer Market

Sales Slow Release Coated NPK Cl NPK/ S Straights

Inhibitors Urease Inhibitors Age Years

Development

Growth

Maturity

! Increasing amount of different formulas

! Low content of P2O5 ! Increasing demand for sulfate ! availability of special trace elements as Se

! High Tech Complex Fertilizers as for example

16-18 October 2002 Global Trade of NPK Compounds - Current Situation and Trends

World NPK installed Capacities Actual Production and Consumption

mill. t N

North America 0.3 0.2 1.4 0.2 1.5 2.7 0.3 2.0 2.1

West Europe 2.6 1.8 2.1

Former USSR East Europe 0.7 0.4 0.3 1.1 0.6 0.2 1.1 0.6 0.2

0.7 0.4 0.3 Asia

Africa 0.3 0.2 0.3 Latin America 0.2 0.2 0.3 0.2 0.2 0.3 0.3 0.2 0.3

3.9 2.1

4.6 3.1 3.0

4.1

Oceania 0.1 0.0 0.0 0.1 0.0 0.0

- Capacities = NPK - 2005/06 = estimated - Consumption (mixed granules and blends are not schown as NPK consumption, except for USA, Japan, Turkey and West Europe).

Capacities Production Consumption

2000/01 2005/06 9.3 9.9 5. 7 7.7 6.4 8.8

8

16-18 October 2002

Global Trade of NPK Compounds - Current Situation and Trends

World Population Growth

in Bill.
10 9 8 7 6 5 4 3 2 1 0
1650 1700 1750 1800 1850 1900 1950 2000 2025 2050

Asia/Oceania Africa Latin-America North-America Europe

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Global Trade of NPK Compounds - Current Situation and Trends

Production and Consumption in Asian Countries

Consumption Production 1995/96 2000/01 2005/06 2,6 3,1 4,1 1,5 2,1 3,0
Blends and mixed granules are included in the consumption figures in Japan and Turkey
1,5

mill. t N

Japan

1,5 1 0,5 0

Turkey

1 0,5 0

1,5 1 0,5

China

1,5 1 0,5 0

Southkorea

India
1

1,5
0

Thailand

1,5 1 0,5 0

1 0,5 0

Philippines

1,5 1 0,5 0

Others

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Global Trade of NPK Compounds - Current Situation and Trends

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World Major NPK Exporters

mill. t product

Philip.

S.Korea

Source: Efma

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Global Trade of NPK Compounds - Current Situation and Trends

Western Europe

Jordan

others
11

FSU

5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0

Year 1990 1995 2001

Total 5.3 7.4 7.4

World NPK Trade Flows of Major Exporting Countries in 2001 (estimated)

mill. t product

d lan Po

0.1

Russia
a Ch in

WE

Ger m. 0 .3
Jordan

0.5
Ira n

1.6

S.Korea
/S o.1 ea or .K

o 0.1 Mexic
en 0.1 V e ezu la

0.1

Chin a
Th

Japan

N.

0.2
t n. V ie

0.1

Kenia

0.2 Th

0.3

Source: Efma

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Global Trade of NPK Compounds - Current Situation and Trends

0. 2
./ a il

0.1
nd la ai

Philippines

12

World Major NPK Importers

mill. t product
5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0

Year 1990 1995 2001

Total 5.3 7.4 7.4

Asia

Africa

N.America

Latin America

Central Europe

Oceania

Source: Efma

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Global Trade of NPK Compounds - Current Situation and Trends

others
13

WE

FSU

Import Duties
! Africa: ! Asia: 0-5% exception: Algeria 15%

0-5%

exception: Saudi-Arabia: 12% China: 4% - for quantities exceeding quota: 50%

! South America: ! North America: ! Eastern Europe/FSU: ! Western Europe

0-10% 0% 0-11% 6.5% no duties for GSP* countries

(some countries have preferential duties based on bilateral trade relations)

* GSP = general system of preferences 16-18 October 2002 Global Trade of NPK Compounds - Current Situation and Trends 14

World NPK Projects* from 1990 to 2004 and later

mill. t N

Total 3.43
Thailand Poland 0.15 0.14 USA 0.13

India 0.12 Indonesia 0.11

Malaysia 0.06 Turkey 0.06 Russia 0.04

China 2.46

others 0.17

* New installations and extensions due to technical improvements Source: EFMA

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Global Trade of NPK Compounds - Current Situation and Trends

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China NPK Plants

1000 t product

+ Project: July 2003

+ Project: July 2004

IFA-Quebec13/-20.8.2002

Plants
1- 200 201- 400 401- 600 601-1.200 Project under study
16-18 October 2002 + Project: Dec.2004 Global Trade of NPK Compounds - Current Situation and Trends 16 + Project: July 2003

China - Reasons for Higher Complex Fertilizer Use

China National Chemical Information Center: Consumption of chemically (June 2001) will increase annually of an amount of 20% ! due to the constant expansion of Cash Crop areas " due to higher income, farmers tend to use more and high valuable fertilizers ! due to high unexploited potential of fertilizer use in the west of China
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produced NPK

WTO Agreement - Liberalisation of Trade

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Global Trade of NPK Compounds - Current Situation and Trends

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Summary

" " " " "

The NPK- market is influenced by certain factors: agriculture situation (income of farmers, produced crops) subsidies of companies, raw material, energy import duties population development life cycle

! ! ! !

The European Market is looking for new challenges China is a developing NPK market. Imports are still high but are gaining less importance because of own production FSU countries are exporters, selling product at low prices. As importers they are of no importance. Consumption is very low. South American markets do mostly have import duties. Furthermore the economical situation in some major markets prevents imports.

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Global Trade of NPK Compounds - Current Situation and Trends

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