The ongoing supply chain issues caused by the COVID-19 pandemic,
climate change-related events, and the ensuing widespread sanctions levied on
Russia due to the conflict with Ukraine have resulted in significant worldwide
shortages of a range of critical fertilizers. Therefore, the coming 10 to 20
years will be vital for transitioning to a global food system that manages
agricultural mineral nutrients holistically.
اضافة اعلان
Fertilizers are needed to boost crop production to
keep people fed and healthy. Nitrogen, phosphorus, and potassium, or NPK, are
the “Big 3” primary nutrients in commercial fertilizers. Each of these
fundamental nutrients plays a crucial role in plant nutrition.
The total global production of fertilizers is worth
some $185 billion. Strong demand and higher input costs had already driven
fertilizer prices up in 2021. The Ukraine conflict disrupted supplies and
further raised the prices of fertilizers.
Russia, a leading exporter, has a 12.6 percent
share, and 15 percent after including raw materials. Russia is also the leading
exporter of fertilizer raw materials: 23 percent of ammonia exports, 14 percent
of urea exports, 10 percent of processed phosphate exports, and 21 percent of
potash exports. Belarus is the second-largest exporter of potash, with a 20
percent share, according to data from The Fertilizer Institute.
The global fertilizer market is expected to grow
exponentially over the next five to seven years and generate revenue above $323
billion by 2028. This data provides deep insight into the industrial market’s
current and future opportunities across various fertilizers products (nitrogen,
phosphorus, and potassium), applications (fertilizer, animal feed, fungicides,
cosmetics, food preservatives, others), and geography markets (Asia-Pacific,
North America, Europe, South America, Middle East, and Africa).
The Big 3 fertilizer components are available in
Jordan and operate within an oligopolistic market. A few large companies
dominate the market due to barriers to entry, granting a great deal of pricing
power and a sustainable competitive advantage.
Jordan Phosphate Mines Company and Arab Potash
Company, with a strong foundation and a positive outlook toward creating
additional value, are perfectly positioned to ride this tailwind of increased
demand into future success and capitalize on the growing demand for fertilizer
products.
Their efficacy in fulfilling such needs is evident
in their stock and financial performance. The companies have not only carefully
managed capital expenditures to ensure the necessary infrastructure to maintain
pace with increasing demand, they have also established economies of scale,
primarily through their network of flexible, low-cost mines.
The fertilizer sector is vital to the Kingdom, and has the great potential to become Jordan’s most significant source of income. …
Jordan needs to produce nitrogen-based fertilizers
(by mixing nitrogen from the air with hydrogen from natural gas), which is
commercially available at the National Petroleum Company at Risha field,
northeast of Jordan. Nitrogen/ammonia production will be part of the efforts
made in the potash and phosphate sectors, and to develop a deep association for
improved technologies, logistics, and application in downstream fertilizers to
produce NPK products.
These plants would be powered by very cheap natural
gas to be more competitive in the production of other fertilizers, like MAP,
DAP, and potassium chloride. In addition, Jordan can produce ammonia through
the green hydrogen project, which is under development by Fortescue Future
Industries, located in Aqaba.
The fertilizer sector is vital to the Kingdom, and
has the great potential to become Jordan’s most significant source of income,
and help it reduce the import of fertilizers. The sector will create more jobs
on a massive scale, increase inflow of foreign currency, and accelerate
economic growth.
Fertilizers are an invaluable input for the
agricultural sector; they guarantee farm productivity and help attract more
entrepreneurs into the agribusiness, add value to farming, and make the nation
self-sufficient in food production.
The writer is a board member of a Jordanian public-sector
government investment management company since 2019. He is currently the
Business Development Director at Edgo, he worked with Petrofac, an
international EPC company in various positions and countries in the Middle
East, North Africa & UK region. Alayani holds a BSc in Mechanical
Engineering (2006) and an MBA from the University of Aberdeen, UK (2021).
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