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Fertilizer Market in India Rakesh Kapur Jt. Managing Director, Indian Farmers Fertiliser Cooperative Limited, India & Chairman, Fertiliser Association of India, India
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Rakesh Kapoor

Feb 11, 2017

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Page 1: Rakesh Kapoor

Fertilizer Market in India

Rakesh KapurJt. Managing Director, Indian Farmers Fertiliser Cooperative Limited, India&

Chairman, Fertiliser Association of India, India

Page 2: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Facts about India

Agriculture is livelihood to 58% of the country's population. Country has 2nd Largest Arableland.

Monsoon Dependent. Rainfall influences fertilizer consumption & agriculture production.

Agriculture growth : Average 4% per annum.

Sustainable use of Agri-nutrients playing an important role in increasing productivity.

Demography on increasing trend. 17% of World population.

Income avenues, increasing average absorption and rise in average calorie intake.

4th largest destination for FDI among developing countries with Net FDI inflows of US$ 36Billion in 2015-16. Higher FDI expected in 2016-17.

Page 3: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

India – A high value Food Power House

Food grain production expected to marginallyincrease from 252.02 Mill MT (2014-15) to252.22 Mill MT (2015-16).

Horticulture Production has outpaced Foodgrain production. (Est. 283 Mill MT in 2015-16)

Global leader in production of Pulses (~18 MillMT) and Milk (~140 Mill MT).

One of the largest producer of Coarse Cereals(~43 Mill MT) and Oilseeds (~27 Mill MT) in theWorld.

Strength of high acreage of farming (~194 Millha) and involvement of major chunk ofpopulation in farming (~263 Million).

Commodities % Share Globally

Rank Behind

Wheat 13 Second China

Rice 22 Second China

Pulses 25 First

Groundnut 20 Second China

Potatoes 12 Second China

Onion (Dry) 22 Second China

Vegetables & Melons 11 Second China

Fruits 12 Second China

Sugarcane 18 Second Brazil

Milk 18 First

Source : FAO 2013

Page 4: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

India Share in Global Agriculture Exports and Export to West Asia

India’s Agri Export share to total National Exports hasincreased from 9.7% (2010-11) to 12.7% (2014-15).

Agri Export share in International market has increasedfrom 1% to 2.5% over the period.

India’s Share in Global Agriculture Export Trade 2014 valuedat US$ 43 Billion (US$ 1430 Billion by major 15 Exporters).

Indian Export in 2015-16 stood at US$ 261 Billion.

Rice, Cotton, Spices, Meat & preparations, Sugar and OilMeals are some of the major exportable Agri commodities.

West Asia comes under top 5 destinations for Agricultureproducts exported by India.

India Exports benefit from Government Policies.

Global Agri Export 1980 1990 2000 2014

India Share 1.0 0.8 1.1 2.5

Source : FAO(2015-16) Saudi

ArabiaUAE Other West

Asia countries

Floriculture 5.6%

Fresh Onions 11.9%

Fresh Vegetables 19.0% 6.5%

Mangoes 60.6% 5.3% 5.1% (Kuwait)

Grapes 7.5% 4.5%

Other Fruits 38.6% 9.0% 4.5% (Iran)

Sheep/Goat Meat 22.5% 56.4%

Poultry Products 12.4% 26.5% (Oman)

Dairy Products 24.0%

Basmati Rice 24.2% 13.7% 32.3% (Iran, Iraq, Kuwait)Source : APEDA

Page 5: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Global Demand for Agriculture produce continue to rise.

Expansion of farmland and Investment in raising environmentally sustainable agriculturalproducts through efficient use of fertilizers has to come in future.

Agricultural produce from countries having exportable surplus is essential for eradicatingundernourishment and overall Development of Society.

Developing countries in Asia and Latin America, reeling under population pressure, forcedto increase fertilizer consumption to feed their masses.

Agriculture- Future Trends

Page 6: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Issues Confronting Indian Agriculture

Small and fragmented land-holdings – 67% ofLandholdings below 1 hectare.

Higher Agriculture Productivity - Key challenge.

Fertilizer Use per hectare significantly lower thanneighbouring countries.

Strong agricultural prices and farmer margins - A pre-requisite for increased agricultural productivity.

Optimal fertilizer consumption is necessary for futureyield increase provided it is available at a price whichfarmer can afford.

144252

433

INDIA BANGLADESH CHINA

FERTILIZER USE PER HA

Marginal67%

Small, 18%

Semi-Medium,

10%

Medium, 4%

Large, 1%

SHARE IN OPERATINAL HOLDING%

Source : FAI

Page 7: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Agricultural Productivity/Fertilizer Consumption

1622

4409

2474

0500

100015002000250030003500400045005000

Productivity (Kg/ha)

Madhya Pradesh Punjab

Uttar Pradesh

84

217

149

0

50

100

150

200

250

Fertiliser Consumption (Kg/ha)

Madhya Pradesh Punjab

Uttar Pradesh

Productivity gaps in stateshaving higher cropproduction and contributiontowards National food grainproduction.

Linkages are neededbetween crop productivityand fertilizer consumptionalong with adoption ofpackage of practices

Source : FAI

Page 8: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Increased Focus on Agriculture Sector

Global Economic growth @ 3.9% pa in the Medium Term. Indian economy growing @7.3% to 7.8% pa.

Government aggressively focusing on Agriculture.

Soil health and Environmental concerns are being addressed.

Budget allocation of US $ 5370 Million for Agriculture and Farmers Welfare.

Allocation of US$ 777 Mill for Micro-Irrigation and Watershed Development. Bringing2.85 million hectares under irrigation

Support to Organic Farming/ City Compost.

Allocation of US$ 820 Mill to provide Farmers with Crop Insurance.

Page 9: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

FERTILIZER UPDATE - INDIA

Page 10: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Food Grain Production and Nutrient Consumption - India

18 20 22 23 25 26 28 28 26 24 25.6 26.7

198209 217

231 235218

244259 257 265

252 252

0

50

100

150

200

250

300

350

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

20

14

-15

20

15

-16

Est

.

Mill

MT

Fertilizer Nutrient Consumption Food Grain Production

Fertilizer contribution 40-50% in Cropproductivity.

Higher Farm gate price reduces fertilizerconsumption and Food grain production.

Fertilizer inventory increased on account of02 consecutive droughts in past two years.

Well timed contingency measures andpromotion of better crop varieties restrictedloss in production.

Good Monsoon this year. Food grainproduction targeted at 270 Mill MT in 2016-17 (7% rise).

Page 11: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Rainfall, Area Sown and Fertilizer – India

La Niña occurrence favoured rains (~1216 mm)during the year 2010.

Area sown for food grain production increased by4% and fertiliser consumption by 6% in 2010-11.

Monsoon rainfall likely to be above 106% of LPA in2016. (LPA is 89 cm.)

Actual Rainfall was 715.2 mm against normalrainfall of 735.5 mm- departure by 3% (till 3rd Sep).

Net Area sown during Kharif Season has increasedto 101.9 Mill ha (increase by 4.7% over last year).

Fertiliser consumption may witness an increase ??.

Price affordability an important concern.

954

12161116 1045

715

2009-10 2010-11 2011-12 2014-15 2016-17Till date

0

500

1000

1500

MM

Rainfall

16.6 17.4

8 6.9

3.5 2.4

0

10

20

30

2010-11 2015-16

NP

K C

on

s. M

ill M

T

K

P

N

Page 12: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Fertilizer Policy Update - India

Government taking various steps to increase Domestic production and improve fertilizer availabilityin the country.

Domestic Price guidelines 2014 introduced to align variations in Gas prices US$ 4.205 – 5.75 perMMBTU (Pre-2014).

Gas Price Pooling w.e.f 01st June 2015 to incentivise Urea production at healthy Energy efficiency.

Strong Commitment by Government for Revival of Old Fertilizers Units – Foundation Stone laid fortwo 1.3 Mill MTPA Urea project (Gorakhpur and Ramagundam)

Mandatory production of Neem Coated Urea and Incentive for Secondary /Micro Nutrients.

Nutrient Based Subsidy rates revision on periodical basis to lower the Subsidy burden.

Possibility for Decanalisation of Urea imports.

Direct Benefit Transfer (DBT) of Subsidy to farmers for greater efficiency in both Production andDistribution of fertilizers.

Page 13: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Nitrogenous Fertilizer – Downtrend in Domestic Gas Prices -India

Gas price has been aligned with the Gas price inGas-surplus economies of US, Canada.

Global decline in Gas prices has reduced Gas pricefrom US$ 5.05 to US$ 3.06 per MMBTU.

Cost Competitiveness with the Global prices.Favourable economics encouraging domesticproduction on equivalent Gas prices.

Gas Prices likely to further reduce to US$ 2.5 permmbtu effective Oct’16. Urea production cost toreduce further.

5.054.66

3.823.06

2.5

NOV 14 TO MA R15

A PR15 TO SEP16

SEP15 TO MA R16

A PR 16 TO SEP16

OCT 16 TO MA R 17 (EXP. )

US$

PER

MM

BTU

(G

HV

BA

SIS) DOMESTIC GAS PRICE

291

220

321

210

0

50

100

150

200

250

300

350

Nov14 to Mar15 April16 to Sep16

Ure

a P

rice

US$

pe

r M

T

Indigenous Cost

Import Parity Price (CFR)

Page 14: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Nitrogenous Fertilizers – Downtrend in Imported RLNG Prices

Feedstock for Nitrogenous fertilizer (Ammonia-Urea) islargely Natural Gas except for China.

Urea manufacturing Units benefitting from low Oil prices.

India benefitted as it pays through an Oil-linked pricingformula. Lower Oil prices lowered Gas prices.

RasGas, Qatar constitutes 70% of the total LNG (Gas)imported in India.

RasGas Contract Price renegotiation resulted in decline inRLNG prices since Jan’16 (from US$ 13.3 to US$ 5.6 perMMBTU).

Indian RLNG price now determined based on 03 monthsCrude average. (Earlier – 60 months).

13.314.7

13.3

5.6

7.1

0

2

4

6

8

10

12

14

16

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Ex-T

erm

inal

(U

S $

pe

r M

MB

TU)

RLNG Price

Page 15: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Gas Price Pooling Policy for Urea and likely Scenario

Fall in Domestic Gas prices and RLNG – Gas Pool Price ondowntrend.

Gas Price Pooling has resulted in increased domesticUrea production at lower production cost.

Highest ever Urea production of 24.5 Mill MT witnessedlast year. Urea Import has lowered to certain extent.

Instances where Indigenous production was cheaperthan Import Parity Price (IPP).

Urea Import Prices on the downtrend. Aggressive Priceoffered recently in last tender.

Low Gas Prices and Urea IPP to reduce Subsidy on Ureaby approx. US$ 1650 Million this fiscal.

9.7 9.9 10.010.1

8.98.8

9.1

7.97.3 7.1

6.26.57.0 7.0

5

6

7

8

9

10

11

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

US$

pe

r M

MB

TU Gas Pool Price for Urea Units

317 322 323 324293 288 298

263 247 242 218 225 239 239

314295 295

280 268 268253

218 214 216 219 216 210 198

0

50

100

150

200

250

300

350

0

50

100

150

200

250

300

350

Ure

a U

S$ p

er T

on

ne

Indingenous Cost

WA Urea CFR Price

Page 16: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Price Affordability - An Important Dimension

Subsidy component on Urea is approx. 70% whileSubsidy on P&K fertilizer is 30%.

Low MRP has resulted in higher Urea consumption(+3.5% growth).

P&K fertilizer consumption affected on account ofhigher MRP.

Raw Materials for P&K fertilizer fully Imported.Price Volatility directly impacts farm gate prices.

Higher US$-INR Parity increases the P&K fertilizersMRP.

Imports getting delayed on failed negotiations.Dilemma for Indian manufacturers.

32.0

10.5

11.5

9

9.5

10

10.5

11

11.5

12

0

5

10

15

20

25

30

35

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

20

14

-15

20

15

-16

E

Rs

pe

r K

g o

f N

(U

rea)

Ure

a C

on

sum

pti

on

(M

ill T

on

ne

) Consumption (Mill Tonne)

Rs per Kg of N (Urea)

7.2

46.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

2

4

6

8

10

12

20

00-0

1

20

01-0

2

20

02-0

3

20

03-0

4

20

04-0

5

20

05-0

6

20

06-0

7

20

07-0

8

20

08-0

9

20

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0

20

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1

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2

20

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20

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4

20

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5

201

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Rs

pe

r K

g o

f P

(D

AP

)

DA

P C

on

sum

pti

on

(M

ill T

on

ne

)

Consumption (Mill Tonne)

Rs per Kg of P (DAP)

Page 17: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Phosphoric Acid Imports for DAP/NPK Production - India

Phosphoric Acid (CFR India)

545 600

Ammonia (CFR India) 240 240

Conversion Cost 30 30

DAP Cost of Production 340 365

Prevailing DAP Price (CFR India)

340

Imported DAP CFR India Price lower by US$ 85 perMT (2016-17 vs 2015-16) for NBS Price fixation.

Forex Parity depreciation effectively reduced theDAP Price by US$ 50 per MT.

Post Q1 2016, DAP Price in India have gone downto US$ 340 per MT.

However, Phosphoric Acid price in India reducedfrom US$ 715 per MT to US$ 600 per MT for 2nd &3rd Qtr. 2016.

On prevailing Indian DAP CFR India Price,Phosphoric Acid should be ~US$ 545 per MT basedon formula.

All figures in US$ per MT

Page 18: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

DAP Prices - India

DAP Indigenous Cost of Production is higher by about US$ 25 per MT over Imported DAP.

Companies carrying Inventory of 8.8 Mill MT DAP/ NPK as on 1st August 2016.

Manufacturers have already absorbed additional burden of US$ 25 per MT on blocked Inventories through reduction in Farmgate Price.

High cost of Inventories, sellers reluctance to further lower the Farmgate Prices.

DAP Imports in 2016-17 are likely to be lower.

Page 19: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

WEST ASIA CONTRIBUTION TO INDIAN FERTILISER IMPORTS

Page 20: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

West Asia – A Major Exporter to India

West Asia – a resource rich region for Nitrogenous andPhosphatic fertilizers.

Ample availability pushed the region to increase theirproduction capacities, to cater to high demand offertilisers in nearby South and East Asia.

Fertilizer Export Potential - 50% of Installed Capacity (~47 Mill MT).

Ammonia, Urea, Rock Phosphate, Phosphoric Acid andDAP – Main Export Commodities.

Region exports more than 10 Mill MT fertilizers RawMaterial/Intermediates/Finished Product to India.

17191431

1726

2872

4191

2488

832 1010

1695

3995

2827

3226

110 91

646

2011 2013 2015Ammonia UreaDAP Rock PhosphatePhosphoric Acid

India Import from West Asia (‘000 MT)

Source : IFA/ Other Publications

Page 21: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Decline in West Asia Share - Ammonia

West Asia dominated Ammonia trade with almost85% (1.7 Mill MT) share in 2010. Black Sea(Russian/Ukranian) Export to India was nil.

Over time, West Asia share has declined.Ammonia Export from Black Sea has reached 18%to meet the total Indian Demand of 02 Mill MT.

Natural Gas prices in Black Sea region higher thanprices in West Asia.

West Asia Ammonia prices are higher comparedto Black Sea/ Latin American prices.

Despite higher cost of production, Black Seaoffering lucrative prices to penetrate Indianmarket.

8588

83

80

85

75

02

6

15

13

18

0

5

10

15

20

65

70

75

80

85

90

2010 2011 2012 2013 2014 2015

% S

har

e

West Asia Black Sea

Source : IFA/ Fertiliser Week

628

573

705

608

417

342291

364272

243200

300

400

500

600

700

800

1st

qtr

20

10

2n

d q

tr 2

01

0

3rd

qtr

20

10

4th

qtr

20

10

1st

qtr

20

11

2n

d q

tr 2

01

1

3rd

qtr

20

11

4th

qtr

20

11

1st

qtr

20

12

2n

d q

tr 2

01

2

3rd

qtr

20

12

4th

qtr

20

12

1st

qtr

20

13

2n

d q

tr 2

01

3

3rd

qtr

20

13

4th

qtr

20

13

1st

qtr

20

14

2n

d q

tr 2

01

4

3rd

qtr

20

14

4th

qtr

20

14

1st

qtr

20

15

2n

d q

tr 2

01

5

3rd

qtr

20

15

4th

qtr

20

15

1st

qtr

20

16

2n

d q

tr 2

01

6

3rd

qtr

20

16

US$

pe

r M

T

Ammonia FOB Prices Black Sea Middle EastCaribbean

Page 22: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Opportunity for West Asia – Ammonia (Indian Region)

Yuzhny, Black Sea – Trade Centre for Ammonia.

Russian and Ukrainian supplies mainly to USA, Europeand Mediterranean- Netbacks are highest.

West Asia supplies to South Asian region.

Demand-Supply in South Asia was almost in a balancedsituation in 2013.

Increasing demand in South Asian region. Opportunityfor West Asia with price competitiveness.

Higher CFR India prices may leverage better margins toBlack Sea/Latin America suppliers.

5

10.6

4.6

12

-0.4

1.4

WEST ASIA BLACK SEA/ LA

2013Demand SupplyBalance

6.9

10.1

5.4

15

-1.5

4.9

WEST ASIA BLACK SEA/ LA

2016-17Demand SupplyBalance

(All figures in Mill MT)

Page 23: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Decline in West Asia Share – Urea (Indian Region)

WA dominated Urea trade to India in 2009 with almost 73%share (3 Mill MT). China share - 10% (0.5 Mill MT).

WA has freight advantage of US$ 6-8 per MT over China. Despitethat, ME share has reduced over period.

Lower Urea production in West Asian countries (feedstocksupply problems/ plant outages).

China moved in swiftly. Higher Capacity addition based on Coalmade Chinese Urea more competitive and cheaper with lowerCoal prices.

Indian Urea Import 2015 : China share 71% (6 Mill MT) and WestAsia share 29% (2.5 Mill MT).

Export from West Asian countries to India more competitivewith higher net-backs due to freight advantage. However, WestAsian countries exited Indian Market and focussed on LatinAmerica, SE Asia with lower net back.

73

49 52 4955

30 2922

49 47 5043

69 71

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012 2013 2014 2015

% S

har

e

West Asia China/FSU

Source : IFA/ Fertiliser Week

0

200

400

600

1st

Qtr

20

10

2n

d Q

tr 2

01

0

3rd

Qtr

20

10

4th

Qtr

20

10

1st

Qtr

20

11

2n

d Q

tr 2

01

1

3rd

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11

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Qtr

20

12

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tr 2

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2

3rd

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1st

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20

13

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3

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13

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4th

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Qtr

20

15

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d Q

tr 2

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5

3rd

Qtr

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4th

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15

1st

Qtr

20

16

2n

d Q

tr 2

01

6

3rd

Qtr

20

16

US$

pe

r M

T

Urea FOB PriceChina

Page 24: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Urea Demand/ Supply Balance - India

Urea demand increasing at CAGR of 3 %.

Government committed to revive old Fertilizer Units.

India’s Urea production to increase in near term by 6.7 Mill MT supportedby New Capacity, New Energy norms, lower Natural gas prices.

Indian Urea import to reduce from 8.7 Mill MT to 7 Mill MT in 2016-17.

Urea Import likely to reduce from current level of 8.7 Mill MT to 3 Mill MTin 2020-21.

IFA projects Global Potential Surplus of 18 Mill MT by 2020 excludingrecent Capacity additions announced by GOI.

Global Exportable Surplus to increase due to low Import demand. LowerUrea prices expected due to excess Supply.

29.5

24.5

8.7

30.4

24.5

7

34.2

31

4

DEMAND PRODUCTION IMPORT

2015-16 A 2016-17 E 2020-21 E

All figures in Mill MT

Page 25: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

West Asia Share in Exports to India – Phosphatic

New Phosphate capacities built up in Saudi Arabia.DAP Export potential has increased.

Export of Rock Phosphate has declined.

Global Processed phosphates Capacity to grow inChina. Proximity to India will make it prominentplayer in setting prices globally.

1221

27 3922

59

45 42 42 41

0

10

20

30

40

50

60

70

2011 2012 2013 2014 2015 P

% S

har

e

West Asia

DAP Rock Phosphate

40 4249

54

44 52

0

20

40

60

2010 2011 2012 2013 2014 2015

% S

har

e

China DAP

Source : IFA/ Fertiliser Week

569

551

423

330

458

341

300

350

400

450

500

550

600

1stqtr

2012

2ndqtr

2012

3rdqtr

2012

4thqtr

2012

1stqtr

2013

2ndqtr

2013

3rdqtr

2013

4thqtr

2013

1stqtr

2014

2ndqtr

2014

3rdqtr

2014

4thqtr

2014

1stqtr

2015

2ndqtr

2015

3rdqtr

2015

4thqtr

2015

1stqtr

2016

2ndqtr

2016

3rdqtr

2016

US$

pe

r M

T

DAP FOB Price

Saudi Arabia China US Gulf/Tampa

Page 26: Rakesh Kapoor

| Steering the Fertilizer Industry through Challenging Times

Increase in Global Surplus

Capacity Growth higher than the Demand Growth.

Ammonia & Urea capacity increasing by 10% between2015 and 2020 to reach around 230 Mill MT each.

Phosphoric Acid and Potash Capacity to increase by 13%and 22% over the period to reach 65 Mill MT each.

Nitrogen surplus to increase to 14.4 Mill MT (+ 3 Mill MT)by 2020 from current level.

Phos. Acid surplus to marginally increase to 4.2 Mill MT(+ 0.3 Mill MT) by 2020.

Potash Potential surplus to double, reaching 8 Mill MT(+4 Mill MT) by 2020.

Higher Capacity Utilisation may substantially increase theSurplus quantities.

Higher Surplus to impact the Global prices.

11.3

15.8 16.2 15.514.4

3.9 3.7 4.1 4.3 4.2

3.9 4.86.1

7.6 7.9

0

5

10

15

20

2016 2017 2018 2019 2020

Surp

lus

Mill

MT

Nitrogen Phos. Acid Potash

Emphasis on Nutrient Use Efficiency, Speciality Fertilizers to have significant effect in lowering the Demand and increasing Surplus.

Source : IFA

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| Steering the Fertilizer Industry through Challenging Times

West Asia Region playing a Pivotal Role in Food Security

World population growth- 2 Billion more people by 2030. Fertilizers crucial in ensuring access to sufficient,edible and nutritious food.

Changes in GDP and population distribution across the globe will inevitably have an effect on where foodwill be produced and consumed as well as the trade flows of food.

West Asia region population and economic growth can determine fertilizer consumption growth to thephysical limit of its arable land size. Exports to continue.

West Asia region fertiliser exports to Agricultural regions are critical for ensuring Global Food security,additionally earning valuable export revenues.

Traditionally a major food importer, West Asia region has to increase its Market share in taming growingcompetition in fertiliser trade by developing closer relationship with Agriculture regions.

Gulf countries are strategic fit to India’s agenda of securing long term supplies of key fertiliser material/intermediates.

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| Steering the Fertilizer Industry through Challenging Times

Building Trade Relations – Equitable Business Environment

Affordable Fertiliser to Farmers is an influencing factor impacting fertiliser demand in India.

Government intervenes in Price Control and Supply Plans. Benchmarks Farm gate prices of P & Kfertilisers directly or indirectly to ensure affordability.

Policy framework restricts domestic manufacturers to pass on Price impact to farmers. Indiaseeks reasonable Prices for key intermediates to sustain domestic production.

Global Suppliers need to respond more conducively to situational demands.

Prices vary from ground reality and often influenced largely by demand of major importingcountries.

Cartelisation and Monopolistic approach can destabilise business environment.

India calls for building trade relations aimed at Win-Win situation for all stakeholders.

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