The Long Term Market for Phosphates remains strong!
posted on
Mar 05, 2009 12:02PM
Please read the article below. The long term outlook for Phosphates remains strong.
Feb 15, 2009 12:00 PM, By Liz Morrison
World phosphate rock deposits are abundant, but high-quality ore reserves are dwindling.
Like crude oil, phosphorus is a non-renewable resource. Should farmers be worried about running out?
Eventually — but not for a century or so, fertilizer industry experts say.
It's true that phosphate rock, the source of phosphorus (P) fertilizer, is a finite and irreplaceable natural resource. But phosphate deposits are abundant, says Stephen Jasinski, phosphate rock commodity specialist for the U.S. Geological Survey (USGS). And phosphate ore is available in dozens of countries. However, global reserves of high-grade phosphate ore are dwindling. In the long run, that could mean more expensive P products.
THE WORLD HAS at least 15 billion metric tons of proven phosphate rock reserves that can be profitably mined today, the USGS estimates. At present consumption rates, that's enough to last about 100 years, Jasinski says.
There are another 35 billion tons of lower-grade and unexplored phosphate reserves, which are potentially economically feasible. Many of these deposits are too expensive to extract now, Jasinski says, but they could be developed in the future, as processing technologies advance and ore values rise.
Today, the U.S. produces more P than American farmers need — a contrast with nitrogen and potassium, which must be imported in large quantities. Mines and fertilizer factories in Florida, North Carolina, Idaho and Utah produce about 30 million tons/year of phosphate ore, and about 9 million tons of P2O5. Half of P products are exported. The nation has rock reserves to sustain this production level for about 40 years, Jasinski says.
WHILE THERE'S NO current shortage of raw materials for phosphate fertilizers, “What is changing is the quality of rock being mined,” says Terry Roberts, president of the International Plant Nutrition Institute. “High-grade ore supplies are declining.”
The world price for phosphate rock quadrupled in 2007, and fertilizer prices followed, reaching record levels by mid-2008 — but not because we're running out of raw materials, says Kathy Mathers, vice president for public affairs at The Fertilizer Institute, a Washington D.C.-based trade group. Ore prices were pushed up by higher energy and shipping costs, she says, and by sharply higher worldwide demand for phosphorus fertilizers.
AFTER RISING ABOUT 3% in the 2007-2008 crop year, world consumption of phosphate fell off in the second half of 2008. Fast-changing crop and nutrient prices caused farmers to hold off buying fertilizer. Consequently, world output of phosphate rock is predicted to fall about 1% this year, while consumption of P fertilizers is expected to drop about 5%. That's according to a November 2008 forecast by the International Fertilizer Industry Association (IFA).
But the global appetite for phosphate is expected to rebound over the next several years, climbing 2-3% a year, IFA projects. “The fundamentals driving demand haven't changed,” Roberts notes. Population growth, improving diets and rising global demand for food and biofuels will continue to spur crop production and the need for phosphate fertilizers, he says.
It's important to remember that phosphate “is a limited resource,” Roberts adds, “so we have to use it wisely and efficiently.” Plant breeders are now developing new crop varieties that will use P more efficiently.
Farmers can improve P efficiency, too. Some suggestions:
Consider banding P. In many situations, banding immobile nutrients is more efficient than broadcasting, Roberts says.
Recycle P. Manure and other agricultural byproducts are good sources of plant nutrients, “and we encourage farmers to take advantage of these sources,” Roberts says.
Follow a sound nutrient management plan. “In today's volatile environment, that's more important then ever,” Mathers says. Invest in soil testing, she suggests, and put together a nutrient plan that specifies “the right product, at the right rate, at the right time, in the right place.”