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World Fertiliser Markets
by Hugh Stringleman
Astronomical price rises for fertilisers during 2008 were a warning of permanently higher prices in future, industry watchdogs and agricultural commentators have said.
Although the costs of farm nutrients went down again when the soft commodities boom collapsed, next time they go up exponentially it will be for much more serious reasons – a shortage of supply and rampant demand.
Australian agri-professor Julian Cribb, a former journalist who knows how to pick his words, has warned of “peak phosphorus”, which means the world's reserves will run down.
He said the cost of nutrients could rise 500% to 1000% over the next 20 to 30 years and called for a national nutrient plan which would encourage loss minimisation and re-cycling.
Cribb said large proportions of applied nutrients are lost to excretion, exporting and erosion.
"Nutrients are the oil of the 21st century.
"The nation which looks after and re-uses them will prosper both economically and environmentally. It will never hunger.
"The nation which can most successfully 'close the loop' on nutrients by recycling will be at a global economic, nutritional and competitive advantage as well as having cleaner water and a healthier natural environment.
"It will be more food secure on a planet destined for global food insecurity," he said.
Cribb's colleagues at the University of Technology Sydney have argued that phosphorus supply is finite and that more than one-third of the world's need comes from Morocco, from politically unstable regions.
China has the largest known reserves, but in 2008 it placed a tariff on exports to protect domestic supplies. It has been estimated that China uses 40% more fertilisers than its crops need, resulting in about 10 million tonnes of fertilisers a year being deposited into rivers and lakes.
The US is thought to have just 25 years of deposits left, stopped exporting a decade ago and has begun importing.
Diammonium phosphate (DAP), which is the main phosphatic fertiliser in countries which do not use superphosphate, recently rose in price by 50% to US$450/tonne, but still has a way to go to reach its 2008 peak of $1260.
Humans consume three million tonnes of phosphorus annually in their food and excrete it again, which has led some nations to consider recycling urine as a fertiliser. It is claimed the nutrients in one person's urine will grow half to all of the food for another person.
The researchers warn that the trend towards western diets in developing countries, with greater consumption of meat and dairy products, disproportionately raises the consumption of phosphorus.
A balanced diet, one not weighted with meat and dairy, consumes 22.5kg phosphate rock per person per year, or about 3.2kg P. That is 50 times greater than the recommended daily intake of P at 1.2g. Thus most of the P goes to waste.
The worldwide phosphorus industry is also very energy intensive and creates distortions in food production. Thus Africa is both the world's largest source of phosphorus but also the region of greatest food shortages. That is because phosphorus is mined in Africa and sent on long voyages, where in the developed world of the United States and the European Union (which is entirely dependent on imported phosphorus), about one third of the energy usage is in fertiliser production and use.
Apart from the practical suggestion of recycling human waste, the researchers don't offer much practical help in reducing phosphorus use in agriculture, and of course the human race has to eat.
Six billion people will become nine billion by 2050, which requires a second green revolution to avoid starvation. The limitations on crop volumes and yields are arable land, irrigation water, tillage energy and plant-available nutrients.
However there are those in positions of knowledge in the fertiliser industry that say Cribb and his colleagues are crying wolf. They say Morocco still has one hundred year-plus supplies, China has reserves and other deposits will become economic to mine if world prices rise.
Saudi Arabia is building a massive DAP plant to use its own rock and New Zealand, one of the world's largest phosphate importers, has known reserves, under the sea on the Chatham Rise, which at US$200 per tonne for rock, mining becomes viable.
World prices are only half that level now, but they did rise to US$400 briefly during 2008.
Ballance NZ chief executive Larry Bilodeau, a Canadian, said his home country had hundreds of years of potash reserves, while urea is made from nitrogen in the atmosphere.
China can make considerable gains in efficiency of fertiliser use, and would be forced to make cuts in tonnages applied because of environmental pollution due to over-fertilising.
He said fertilisers in China have been cheap, offering quick yield boosts without monitoring or technological advice, but the loss of nutrients into water had been huge, and could not continue.