Mar 23, 2011
The World Market for Potash Fertilisers: What can we expect in the years 2010 and 2011?
Dr. Ernst Andres, Board of Management Marketing and Distribution of K+S KALI GmbH attended the last International conference CIS Fertilizers in Odessa, Ukraine. There he summarised the current situation and developments of the world market for potash fertilisers.
In short, Dr. Ernst Andres pointed out following conclusions in his presentation:
- Significant recovery of potash demand in 2010,
- High utilisation rates within the industry expected for 2011,
- Potash demand will continue to grow,
- K+S KALI GmbH is well positioned to meet the requirements of its global customers.
In the following, the editors summarise the main facts of the presentation “The World Market for Potash Fertilisers: What can we expect in the years 2010 and 2011?“ of Dr. Ernst Andres, Board of Management Marketing and Distribution of K+S KALI GmbH.
K+S Group – Corporate Structure 2010
The structure of the K+S Group is based on the core business sectors fertilisers and salt.
The K+S Group is one of the world's leading suppliers of standard and speciality fertilisers. In the salt business, K+S is the world’s leading producer with sites in Europe as well as North and South America. K+S offers a comprehensive range of goods and services for agriculture, industry, and private consumers which provides growth opportunities in virtually every sphere of daily life. The K+S Group employs more than 15,000 people.
K+S KALI GmbH – Haulage of Crude Salt and Production
K+S KALI GmbH is the legal entity for the potash and magnesium business segment of the K+S group.
K+S KALI GmbH extracts crude potash and magnesium salts from six mines in Germany. These salts form the basis for the production of a large variety of fertilisers. In addition, these crude salts are also processed into products for technical, industrial and pharmaceutical applications. The deposits also contain magnesium and sulphur, which are particularly suitable for the production of specialities.
In 2009 the haulage of crude salt was historically low, because of low potash sales due to the financial and economical crisis which led to a strong decrease of farm prices for agricultural products and reduced potash consumption. Regular crude salt hauling is about 37 Mio. t as shown by the figures of 2008 with sales of about 7.6 Mio. t.
Environmentally friendly production is a challenge for the potash Industry. For centuries K+S has reached highest efficiency in utilisation of resources:
- Maximum energy efficiency (cogeneration),
- Reduced pollutant and CO2 emissions due to the use of natural gas,
- Bisection of salt water formation by 2015,
- Dry raw salt separation (ESTA®).
The Segments of K+S KALI GmbH
K+S KALI GmbH is not just a potash producer. The composition of the crude salt deposits makes the difference to other producers as they consist of potassium chloride and magnesium sulphate. This allows to produce a broad portfolio of tailor made products for various applications in the segments of fertiliser, industrial products, health care & food and animal feed.
Product Portfolio 2009
The product portfolio offers a variety of potash and magnesium products and includes the main potash product potassium chloride but also fertiliser specialities with amongst others magnesium, sodium and sulphur as additional nutrients. In addition to that K+S KALI GmbH offers a range of potash and magnesium products for industrial applications. The portfolio differentiates the products for industrial applications in the two further segments health care & food and animal feed.
World Potash Capacity, Production and Sales
- Transitional year 2010: significant revival in demand expected, but no complete utilisation of capacity yet
- As of 2011 and beyond, long-term growth rates again expected at 3% to 5% p.a.
- Realisation of announced new capacities will depend on future potash price levels and the technological/geological situation of the deposits
The Global Challenge: Potash Demand Will Continue to Grow
The global challenge is to feed a growing world population with less available arable land per capita. This means that yield per ha has to be increased. Therefore fertiliser use has to be enhanced.
The demand for biofuels will continue to grow.
Production and Consumption Developments (Wheat and Coarse Grains)
- Over the past thirty years, annual global production of cereals has often fallen short of demand
- Despite increasing harvest levels during the last ten years, these structural supply and demand gaps have resulted in very low stocks-to-use ratios on a historical basis
- Although ideal weather in 2009 resulted in near-record harvests stocks-to-use ratios remained on a relatively low level
Price Development of Major Agricultural Commodities
The fundamentals of the agricultural markets are positive: Commodity prices exceed their 2006 levels and are forecast to grow further. Higher commodity prices will create additional fertiliser demand.
Net Agricultural Production for Selected Countries
7th International conference CIS Fertilizers 2010
The 7th International conference CIS Fertilizers took place in Odessa, Ukraine last year in November. One of the speakers was Dr. Ernst Andres, Board of Management Marketing and Distribution of K+S KALI GmbH. He summarised the current situation and developments of the world market for potash fertilisers.
The main topics during the 7th International conference CIS Fertilizers were
- World Fertiliser Market and Agri-Production Perspectives,
- Major Fertiliser Markets: Consumption, Raw Materials, Competitiveness,
- International Fertiliser Trade and Sea Shipping,
- CIS Fertilisers Market.