04/03/2014

The African Fertilizer Industry

Current Situation and
Potential Growth Opportunities

Patrick Heffer, IFA

Argus-FMB Africa Fertilizer Conference

19-21 February 2014, Marrakech, Morocco

Why Agriculture and Fertilizers

Count in Africa?

In resource-poor low-income countries

(excluding sub-Saharan Africa), agricultural
growth is 5 times more likely to reduce
poverty than growth in any other sector.

In sub-Saharan Africa, agricultural growth is

11 times more effective at reducing poverty.
FAO, State of Food Insecurity in the World, 2012

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Contents

 Current situation
 Medium-term outlook
 Long-term prospects

CURRENT SITUATION

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Fertilizer Consumption
in Africa in 2011/12

Africa’s Share of World Consumption Contribution of the Sub-Regions

to African Consumption
3.3 Mt
4.9 Mt
1.1 Mt

0.5 Mt

Source: IFA Agriculture

Main African Fertilizer-Consuming

Countries

Average
2009-11
Egypt 1 389
South Africa 702
Nigeria 559
Morocco 359
Ethiopia 233
Kenya 181
Tunisia 134
Algeria 114
Others Africa 1 008

Source: IFA Agriculture

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African Cereal Yield

African vs. World Cereal Yields Evolution of African Cereal Yields

79% of world average

56% of world average

40% of world average

Source: FAOSTAT

Undernourishment Trends
by Region

Source: FAO 2013

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Africa’s Contribution to World

Fertilizer Production in 2012

Source: IFA PIT

Production of Ammonia and Urea

in Africa in 2012
Ammonia Production Share Urea Production Share

Total = 5.7 Mt Total = 4.8 Mt

Source: IFA PIT

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Production of P Rock and Processed

Phosphates in Africa in 2012
P Rock Production Share PP Production Share

Total = 41.7 Mt Total = 6.2 Mt

Source: IFA PIT

MEDIUM-TERM OUTLOOK

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Economic Outlook

2013 2014 2015 2018

World +2.9 +3.6 +4.0 +4.1
Annual GDP Growth (%) SSA +5.0 +6.0 +5.7 +5.7

Source: IMF, Oct 2013

Global Fertilizer Demand

Medium-term Outlook (Mt nutrients)

195
Base year

Average Annual Change

Base Year  2017/18
N +1.5% p.a.
P2O5 +1.9% p.a.
K2O +3.0% p.a.
Total +1.8% p.a.

Source: IFA Agriculture

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Regional N Fertilizer Demand

Medium-term Outlook (Mt N)

27%

28%

17% Top-3 = 71%

8% +3.1% p.a.

Source: IFA Agriculture

Regional P Fertilizer Demand

Medium-term Outlook (Mt P2O5)

17%

23%

Top-3 = 73%

33%

5% +3.3% p.a.

Source: IFA Agriculture

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Regional K Fertilizer Demand

Medium-term Outlook (Mt K2O)

33%

23%

Top-3 = 80%

25%

2% +3.3% p.a.

Source: IFA Agriculture

Projected Evolution of African

Demand (Mt nutrients)
IFA
forecasts  Marginal growth
between the
beginning of the
Maputo Abuja +44% 1980s and 2007
2003 2006
Structural
Adjustment  2006: Abuja
+13% Summit  call to
increase fertilizer
demand
+400%  Steady demand
growth since
2007, driven by
SSA
 Regional demand
seen reaching 6
Mt by 2017
Source: IFA, June and December 2013 + FAO, June 2012

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Anticipated Capacity
Developments in Africa
Capacity Developments 2008-2018(f)
Capacity / World Share 2012-2018(f)

Source: IFA PIT

LONG-TERM PROSPECTS

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Demographic Projections

Based on the medium scenario of the UN World Population Prospects

Population Projections (million) Population Projections (billion)

Africa’s share of world population

39%

25%

13%

Source: UN, 2013

Projected Per Capita Food

Consumption (kcal/person/day)

Incidence of
undernourishment
seen sharply
declining in SSA:

from
28% in 2005/07
to
7% in 2050

Source: FAO, June 2012

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Projected Evolution of World

Agricultural Production by 2050

Projected increase of
the world agricultural
production between SSA
2005/2007 and 2050:

+60%
Conservative scenario

+170% in SSA

Source: FAO, June 2012

Projected Increase in
Irrigated Area (Mha)

3%
irrigated
only

Source: FAO, June 2012

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Sources of Growth in Crop

Production (%)

Projected changes between

Arable land Increases in Yield 2005/07 and 2050
expansion cropping increases
intensity Yield increase
Higher intensity
1961- 2005/07- 1961- 2005/07- 1961- 2005/07- Land expansion
2007 2050 2007 2050 2007 2050
100%
SSA 31 20 31 6 38 74
80%
World 14 10 9 10 77 80
60%
Source: FAO, June 2012

40%

Will require higher 20%

application rates 0%
SSA World

Projected Evolution of Regional

Fertilizer Demand

Total Fertilizer Consumption (Mt nutrients) Fertilizer Application Rates (kg/ha)

1961/63 2005/07 2050 2050 vs. World NENA SSA

2005/07 200
World 34.3 166 263 +58%
OECD 30.0 51 62 +22% 150
East Asia 1.9 62 79 +27%
South Asia 0.6 27 59 +119%
100
LatAm 1.1 17 45 +165% Well below the
NENA 0.5 8 12 +50% Abuja target
50
SSA 0.2 1 6 +500% 27
8
0
IFADATA:  Africa ~10 Mt
 NENA ~6.5 Mt  Conservative scenario 1961/63 2005/07 2050
1/3 N. Africa + 2/3 W. Asia (population, biomass,
 SSA ~2,5 Mt application rates) Source: FAO, June 2012

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In Summary

Fertilizer consumption
 Today: Very low fertilizer consumption  soil mining, large yield gap, high
prevalence of hunger
 Outlook
o Driven by population and economic growth
o Sharp increase in regional food demand and production
o Dynamic fertilizer demand growth: +3% per year for the medium-term;
SSA could be a driver of world fertilizer demand growth beyond 2030

Fertilizer supply
 Today: Strong position on the P market; Net exporting region
 Medium-term outlook
o P market: Sharp anticipated capacity increase in Morocco
o N market: Algeria and Nigeria seen driving the regional outlook

IFA Initiatives

 Improving fertilizer consumption data

quality in SSA
o Sponsor

o IFA Task Force on SSA Fertilizer

Consumption Statistics

 Facilitating market development

o Partnership with AFAP, IFDC…
o Launch of the African Fertilizer
Volunteers Program

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for questions/comments:
[email protected]

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