Asia Fertiliser Outlook
BMI View: We believe Asia will remain the world's largest consumer of all three fertiliser types, as we expect the continent's agricultural production to increase in the coming years. The next challenge for farmers will be soaring input costs and fertiliser efficiency. China and India are looking to diversify potash procurement away from the Cantopex 'cartel' in favour of domestic and independent producers.
Fertiliser use in Asia has soared in recent years, especially in India, Pakistan and Malaysia, fuelled by growth in food consumption and governmental support via generous subsidies, especially in South Asian countries. China and India are the world's largest consumers of fertilisers. Overall, we expect the consumption of fertilisers in the region to grow rapidly, driven by rising rural incomes, greater availability of farm credit, contract farming and public/private awareness campaigns. Consequently, the region will remain reliant on imports of these nutrients.
However, the region's dependence on imports of nitrogen might slowly decline and if planned facilities are commissioned in time, according to the UN Food and Agriculture Organization (FAO). In fact, many countries in the region, namely Brunei, Indonesia, Malaysia, Myanmar, the Philippines and Thailand, have large proven natural gas resources, which are needed for urea production.
|Select Countries - Use Of Fertilisers By Crop, 2008 (% of total)|