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Comment: Opportunities and challenges in the GCC fertiliser market

by Guest on Aug 30, 2017

Dr Abdulwahab Al-Sadoun, secretary general, Gulf Petrochemicals and Chemicals Association (GPCA).
Dr Abdulwahab Al-Sadoun, secretary general, Gulf Petrochemicals and Chemicals Association (GPCA).

The future of the fertiliser industry depends on our ability to provide goods and services that help feed the world, improve lives, and protect the environment, comments Dr Abdulwahab Al-Sadoun, secretary general, GPCA.

By 2050 the world population is expected to reach a peak of 9.7 billion people. This means that between now and then there would be an extra 2.4 billion people to feed, clothe and educate, and whose needs for clean water, energy and sanitation would need to be met.

This comes against the backdrop of a mounting food security crisis, increasing water scarcity, limited arable land and rising sustainability challenges. To meet the needs of an almost ten billion strong planet, world agricultural production of crops and livestock would need to rise by 60 to 111 percent.

Need for specialised fetilisers

Doubling food production between 2005 and 2050 is in line with the UN Sustainable Development Goal 2: End hunger, achieve food security and improved nutrition, and promote sustainable agriculture. It is also aligned with UN Sustainable Development Goal 12: Ensure sustainable consumption and production patterns.

To be able to help meet these targets, farmers all over the globe would require high quality, highly effective and highly specialised fertilisers. According to the UN, growing land degradation and declining soil fertility, among other factors, are lessening the ability of soil to supply food.

Fertilisers help maintain soil fertility, while increasing food production and improving farmers’ livelihoods. They also help safeguard natural habitats such as forests from being converted in to farm land, thus preserving biodiversity and tackling climate change.

As such, fertiliser production has a crucial role to play in driving sustainable and efficient agriculture industry, while supporting socio-economic development and protecting the environment.

The GCC scenario

The fertiliser industry is also a key contributor to job creation and economic growth. It is one of the largest segments by volume in the GCC’s chemical industry, representing 25 percent of total regional capacity.

In 2016, the sector accounted for 54,100 direct and indirect jobs, i.e., for every job created in the fertiliser sector, three more jobs were generated elsewhere in the economy. More than half of the employees in the fertiliser industry – 51 percent – are GCC nationals.

Over the last decade, employment figures in the GCC fertiliser industry grew by 8.7 percent per annum, while the GCC fertiliser production capacity almost doubled from 19.4 million tons in 2006 to 37.8 million tons in 2016.

In 2017, the GCC fertiliser production capacity is estimated to reach 42.3 million tons, up from 37.8 in 2016, growing at a rate of 11.9 percent year-on-year. Saudi Arabia continues to lead the GCC fertiliser production, raising its total capacity by almost a third to 21.5 million tons in 2017, from 16.8 in 2016.

This region is an important dryland agriculture area. Such drylands account for 40 percent of world land area and houses some two billion people, 90 percent of whom live in the developing regions. In total, one billion people rely on dryland-produced crops for their daily food.

Currently, the GCC fertiliser production is dominated by nitrogen fertilisers. However, significant opportunities remain to diversify its product base by investing in specialty products.

4R Nutrient Stewardship

As food demand worldwide continues to increase in both sophistication and volume, higher crop production would also need to rise in line. Particularly, in regions where water resources are relatively scarce, the need for specialty fertilisers is even greater.

Access to high quality fertilisers is absolutely key to sustainable agricultural growth. No matter what crop or region, highly effective and efficient fertiliser use is key to increased and sustainable food production.

In order to maximise their efficiency, the industry would need to continue to spearhead the 4R Nutrient Stewardship programme, designed to educate farmers to use the right product, at the right time, at the right place, and at the right rate.

Furthermore, it would need to continue its efforts to bridge the information gap among service providers and farmers, ensuring that practical advice is available on sustainable field practices that preserve and improve soil. There also remains a need to continue to support farmers in optimising fertiliser application.

Our fertiliser products are the essential engines of agricultural productivity. Fertilisers, if correctly used, can significantly protect and enhance a nation’s soil resources. By providing the right nutrients a certain land type needs, they can safeguard the vitality and productivity of soil, thus enabling the production of  healthy crops.

The role of new technologies

To maximise the positive impact of the fertilisers, the industry would need to play a growing role in assisting in human capacity building and the introduction of new technologies to the farmers.

In order to produce more sophisticated products, greater technical know-how will be required, which is why investment in R&D and innovation must remain a priority for fertiliser producers and technology developers alike.

Navigating a complex sustainability landscape, while addressing the needs of a world with fast expanding population will require us to develop new technologies or utilise existing solutions.

The future of the fertiliser industry depends on our ability to provide goods and services that help feed the world, improve lives, and protect the environment. To ensure that no one goes hungry in a world with unprecedented population growth, we need to innovate and collaborate in new and expanded ways.


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