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World fertilizer prices continue to soar, scientists stress need for fertilizer efficiency

World fertilizer prices doubled in 2007 -- but phosphate doubled again in the next 3 months; effects of the earthquake in China on global prices are uncertain

IFDC

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IMAGE: World fertilizer prices, especially diammonium phosphate, rose sharply in 2007 then skyrocketed -- off the chart -- from January to April 2008. view more

Credit: Graph by IFDC from information obtained from Green Markets and FMB Weekly.

World fertilizer prices doubled in 2007--but the price of phosphate fertilizers then doubled again, and all fertilizer prices rose, in the 3 months from February through April 2008. The effects on global fertilizer prices of the devastating May 12 earthquake in Sichuan Province, China--a major production area for nitrogen and phosphorus fertilizers--are yet to be determined.

China had already imposed dramatic new export duties on fertilizer, to keep it in the country, effective April 20. New tariffs on nitrogen fertilizers are 130% through September. Tariffs on diammonium phosphate (DAP) and other phosphorus fertilizers are now 135% and will run through December.

"Soaring fertilizer prices affect the rural poor the most, especially in Sub-Saharan Africa, the world's poorest region," says Dr. Amit Roy, President and CEO of IFDC--an International Center for Soil Fertility and Agricultural Development.

"High commodity prices allow commercial farmers in developed countries to cope with high fertilizer prices. But rising food prices generally hurt subsistence farmers, particularly in Africa. Those farmers consume most--or all--of their meager harvests.

"Those farmers desperately need fertilizers not only to feed their families but also to replenish their nutrient-depleted soils. The current fertilizer situation emphasizes that we need more research to increase fertilizer efficiency."

Soaring prices

The price of DAP increased by five times over the past 15 months. DAP sold for about US $252 per metric ton in January 2007, then almost tripled to $688 by January 2008--and doubled again, to about $1,230 per ton over the past 3 months.

The price of muriate of potash (MOP), the most common source of potassium, rose from $172 to $288 in 2007. By late April 2008, MOP sold for $500 per ton.

The price of urea, the world's most common nitrogen fertilizer, rose from about $277 to $405 per ton in 2007 and is now about $452 per ton.

Raw materials for fertilizer production

Fertilizers are combinations of the nutrients that plants must have to grow. The most essential elements are nitrogen, phosphorus, and potassium.

Prices of phosphate and potash fertilizers are rising more steeply than the price of nitrogen-based urea because production sources are more limited, Roy explains. Most of the world's phosphate for fertilizer is mined and thus, an unrenewable resource.

Phosphate fertilizers are manufactured mostly in the United States, Morocco, and along the Baltic Sea. All potash, the source of potassium, is mined. Canada produces 40% of the world's annual 44 million tons of potash, followed by Russia and Belarus.

The air around us is 80% nitrogen. Energy, mainly natural gas, is used to convert atmospheric nitrogen to usable forms such as ammonia and urea. Natural gas is also the main raw material resource to provide hydrogen needed in urea production. That's why urea plants are dispersed in oil-producing regions worldwide.

Integrated Soil Fertility Management (ISFM) offers more efficient fertilizer use in Africa

IFDC is developing and implementing application technologies to increase the efficiency of fertilizers for smallholder farmers.

"IFDC has pioneered in the development of Integrated Soil Fertility Management, or ISFM, as a tool to improve the efficiency--and thus the profitability--of fertilizer use for smallholder farmers in Sub-Saharan Africa," says Dr. Henk Breman, IFDC Expert Adviser, Environment and Agronomy, based in Rwanda.

In ISFM, both organic and inorganic sources of plant nutrients, including mineral fertilizers, crop residues, phosphate rock, and lime, are combined as soil amendments to produce higher yields. ISFM has improved soil fertility for 150,000 farmers in West Africa and is being expanded to reach 1 million farm families or 10 million people.

Urea deep placement in Bangladesh

Amit Roy points out urea deep placement (UDP), or the insertion of large briquettes of urea fertilizer into the root zone of transplanted rice, as a technology to increase efficiency of fertilizer use.

"Most rice farmers in Asia broadcast urea directly into the floodwater," Roy says. "Two of every three bags are lost to the air as greenhouse gases or become pollutants of groundwater."

IFDC directed pioneering research to develop UDP and introduced it into Bangladesh in the 1980s. By 2006, more than half a million farmers in Bangladesh had adopted UDP and were reducing urea use by 40% while increasing yields by 25%: about 1 ton/ha. Their net return is $188/ha more than farmers who broadcast urea. UDP has saved 15,000 tons of urea, as yields have increased, reducing government fertilizer subsidies by $7.5 million.

The Government of Bangladesh is expanding UDP to another 1.6 million Bangladeshi farm families on almost 1 million hectares. IFDC has also introduced UDP technology to Cambodia, Vietnam, Nepal, Nigeria, Mali, Togo, and Malawi. Discussions are ongoing with entrepreneurs in Nigeria, who are interested in manufacturing briquette machines.

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