Download Global Market Potential for PNS

GLOBAL MARKET POTENTIAL FOR PNS
PETER S. REINECK
MARSULEX INC.
111 GORDON BAKER ROAD / SUITE 300, TORONTO, ONTARIO M2H 3R1, CANADA
Abstract
Sulphur is a secondary macronutrient required in relatively large amounts for good
crop growth. If sufficient Plant Nutrient Sulphur (PNS) is not available, protein
formation and resultant plant growth will be sub-optimal even though primary
macronutrients (N, P and K) may be present. Yet despite the agronomic case, sales of
PNS remain small relative to sales of N, P and K fertilisers in most parts of the world.
The body of work on which this paper is based was intended to provide a
commercially sound rationale for PNS marketing. Demand drivers such as population
and GDP are identified, from which crop production is projected. The crop mix is
also changing as a result of increasing demand for protein, which generates demand
for livestock feed grains, and the trend to a healthier diet in the developed world. As
the arable land area is not getting any larger, this means an increase in farming
intensity, which drives demand for nutrients. The PNS requirement for good crop
growth is projected to grow at 2% through 2010, which is faster than the projected
growth in crop production, as the changing crop mix includes more oilseeds and other
crops which require more sulphur than average.
The PNS requirement is projected by region and major crop. The regional supply of
PNS from atmospheric deposition, fertilisers and other sources is also projected. The
PNS market potential is then calculated as S fertiliser based on an efficiency model.
On this basis, the global untapped market for S fertiliser was 14 million MT Sulphur
in 1998, and is expected to grow to 22 million MT Sulphur by 2010.
The paper concludes with a brief discussion of factors relevant to realisation of the
market potential for PNS, including crop response, soil type, farming practices,
economics, fertiliser product design and distribution channels.
THE ROLE OF SULPHUR AS A PLANT NUTRIENT
Sulphur is a secondary macronutrient (like Ca and Mg) required in relatively large
amounts for good crop growth (as opposed to micronutrients such as Zinc). Sulphur
is required for synthesis of the S-containing amino-acids which are essential
components of protein.
If sufficient Plant Nutrient Sulphur (PNS) is not available, even though sufficient
Nitrogen, Phosphorus and Potassium (N, P and K, the primary macronutrients) are
available to the plant, protein formation and resultant plant growth will be suboptimal. The typical concentration of Sulphur in plants is in the range of 0.1 - 0.5%.
PNS is absorbed by plant roots almost exclusively as sulphate (SO4--), which may be
contained in fertiliser, or formed by oxidation of elemental S (applied as fertiliser) or
sulphite (SO3--) dissolved in rain, etc.
POPULATION AND ECONOMIC GROWTH DRIVE CROP PRODUCTION
8
70
7
60
6
5
40
4
30
3
GDP ($ trillions)
Population (billions)
50
20
2
10
1
0
1970
1975
1980
Total Population (billions)
1985
1990
1995
Economically Active Population (billions)
2000
2005
0
2010
GDP at PPP EXR (trillions)
FIG. 1: W ORLD POPULATION AND GDP (SOURCES: UN-FAO, IMF)
Growing Global Population and GDP drive increasing demand for food and plant
nutrients. As well, increasing standard of living drives growth in demand for meat
and feed crops versus subsistence crops, which changes the crop mix, and drives
change in the nutrient mix as well as the amount of nutrients used. Increased
affluence also drives demand for processed foods and "healthy" foodstuffs in place of
traditional foods.
Our focus will be on 7 Major Crop Groups which account for 87% of Harvested
Area, and include 11 Major Crops, as follows. Crops excluded are not meaningful
for this analysis.
7 Major Crop Groups
Cereals
Sugar Crops
Roots and Tubers
Vegetables
Fruit
Oilcrops
Pulses
11 Major Crops
Wheat, Corn, Rice
Sugar Cane, Sugar Beet
Potatoes, Sweet Potatoes, Cassava
Soybeans, Canola, Cotton
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1965
1970
1975
Arable Land Area (ha billions)
1980
1985
1990
1995
2000
2005
Harvested Area for 7 Major Crop Groups (ha billions)
2010
2015
Crop Yields (MT/ha)
FIG. 2: W ORLD ARABLE LAND AREA , HARVESTED AREA AND CROP YIELDS (SOURCE: UN-FAO)
Average Crop Yield for the 7 Major Crop Groups increased by 48% from 1970 to
1998, in response to demand for food, based on a 71% production increase, and an
increase in area harvested from 76% to 83% of Arable Land.
The World Arable Land Area is not increasing, so yields must rise to meet demand,
which increases nutrient demand. The proportion of Arable Land Area harvested
varies slightly from year to year based on market conditions, but it appears to be
running close to the practical maximum, so yields from the Harvested Area must
increase. The Harvested Area for the 7 Major Crop Groups also grew over the past
quarter century, as farming intensity increased in response to the need to improve
yields.
7,000
4.50
61
6,000
4.00
194
P o u lt ry M e a t
GDP Per
C a p i ta a t
S o y b e a n s & C a n o la
P r o d u c ti o n
( R H A xi s )
Index (1970 = 1.0)
5,000
1998
P P P E XR
(M T
m illio n s )
3.00
4,000
54
3,000
2.50
218
GDP Per Capita ($)
3.50
E g g s P rim a ry
M e a t , To t a l
To t a l o f 7 M a jo r C ro p G ro u p s
2,000
2.00
B e e f a n d B u ffa lo M e a t
5390
57
1.50
1,000
M ilk , To t a l
551
0
1.00
1965
1970
1975
1980
1985
1990
1995
2000
2005
FIG. 3: INDEX OF GLOBAL PRODUCTION OF 7 MAJOR CROP GROUPS, SOYBEANS & CANOLA, AND
SELECTED LIVESTOCK PRODUCTS, VERSUS GDP PER CAPITA (SOURCES: UN-FAO, IMF)
Growth of Production of Poultry and "healthy" foodstuffs, and to a lesser extent,
Eggs and Total Meat, track well ahead of 7 Major Crop Groups (solid line with X
markers), but below the growth of GDP Per Capita (broken line with no marker).
Interestingly, production of cattle products specifically (beef and most milk) lags
Production of 7 Major Crop Groups, presumably reflecting the same health (fat)
concerns in the developed world which favour growth of Soybeans and Canola, and
dietary preferences (e.g. lactose-free products) in the developing world.
Increasing demand for livestock products generates growth in demand for feed
grains. The Crop Mix is also changing as a result of the trend to a healthier diet in
the developed world. This means getting more out of the land available for growing
crops: the resultant increase in farming intensity drives demand for nutrients.
As shown in Fig. 4, average Crop Yield varies significantly from World-Average for
5 Key Countries, all large agricultural producers which together account for about
50% of World Total Production of the 7 Major Crop Groups, and hence
approximately 45% of nutrient demand.
Yields in China more than doubled, and almost doubled in India. USA Yields are
slightly above World-Average, though behind Western Europe. However, yields in
Canada remained below average because production increases in that country
occurred primarily by increasing the Harvested Area, by 50% from 1970 to 1995, so
yield increase in that period was marginal, and because Cereals such as Wheat (80%
of total crop production in Canada) are mainly harvested dry and therefore have
below average yield numbers.
12.0
10.0
8.0
Yield for total of
7 Major Crop
Groups (MT/ha)
6.0
Brazil
4.0
China
USA
2.0
World-Average
0.0
India
1970 1975
1980 1985
1990
Canada
1995
non-linear scale
1996
1997
1998
FIG. 4: AVERAGE CROP YIELD IN 5 KEY COUNTRIES (SOURCE: UN-FAO)
WORLD CROP PRODUCTION AND NUTRIENT REQUIREMENTS
1,400
1,200
1,000
800
600
Sugar Cane
Corn
Rice
Potatoes
Sugar Beet
Soybeans
Sweet Potatoes
Cotton
1970
Canola
non-linear scale
1980
1990
1996
1998
-
Cassava
200
Wheat
400
FIG. 5: W ORLD PRODUCTION OF 11 MAJOR CROPS 1970 – 1998 (MT MILLIONS) (SOURCE: UN-FAO)
The Global Average Annual Growth Rate for the 11 Major Crops shown in Fig. 5
was 2.0% in the period 1970 - 1998. (Growth for the 7 Major Crop Groups referred to
earlier was 1.9% in the same period.)
% Share of Total World Production of 11 Major Crops
100%
Sugar Cane
90%
Corn
80%
Wheat
70%
Rice
60%
Potatoes
50%
Sugar Beet
40%
Cassava
30%
Soybeans
20%
Sweet Potatoes
10%
Cotton
Canola
0%
1998
1970
FIG. 6: W ORLD PRODUCTION OF 11 CROPS: CHANGE IN CROP MIX 1970 – 1998 (SOURCE: UN FAO)
However, it can be seen from Fig. 6 that the Crop Mix is changing, based on differing
Growth Rates, which ranged from slight negative growth for Potatoes and Sweet
Potatoes, to fast growth for Soybeans and Canola, which are mainly used in the
manufacture of "healthy" foods.
700
6000
600
5000
500
4000
Feed
400
Food Manufacture
3000
300
Food
Other Uses
2000
200
Seed
1000
100
Waste
0
1970 1975 1980 1985 1990 1995 1996 1997
0
1970 1975 1980 1985 1990 1995 1996 1997
non-linear scale
non-linear scale
FIG. 7: CHANGING W ORLD USE PROFILE OF CORN (LEFT CHART) & 7 MAJOR CROP GROUPS (RIGHT
CHART) 1970 -1997 (MT MILLIONS) (SOURCE: UN-FAO)
The major Cereals - Corn, Wheat and Rice - also grew at above average rates.
Growth of Wheat and Corn in particular, is attributed to growth in demand for animal
feed to produce meat and eggs.
Looking at animal feed in more detail, Fig. 7 compares the Use Profiles of Corn and
the Total of 7 Major Crop Groups. It is clear that the above average growth of Corn
Production (3.0%) is driven by demand for Feed, whereas growth of Total Production
of the 7 Major Crop Groups (1.9%) is driven by demand for Food and Food
Manufacture.
A significantly smaller proportion of the 1997 Total of 7 Major Crop Groups was
used directly for Food, and more in Food Manufacture, implying an increased output
of byproduct (soya meal, seed cake, etc.), for use as animal feed.
1,500
60,000
Total Nutrient Requirements for 11
Major Crops (202 million MT)
Crop Production (MT millions)
K2O
81
Production (MT million)
Ca
2
1,000
N
75
Left hand axis
50,000
Mg
S 10
8.5
750
Right hand axis
40,000
30,000
500
20,000
250
10,000
Nutrient Requirement (KT)
P2O5
26
1,250
Potash (K2O KT)
Nitrogen (N KT)
Phosphorus (P2O5 KT)
Magnesium (Mg KT)
Sulphur (S KT)
Calcium (Ca KT)
Ri
ce
So
yb
ea
ns
Co
tto
Su
n
ga
rC
an
e
Po
ta
to
es
Ca
no
la
Su
ga
rB
ee
t
Ca
Sw
ss
av
ee
a
tP
ot
at
oe
s
W
Co
rn
-
he
at
-
FIG. 8: 1998 W ORLD NUTRIENT REQUIREMENTS & PRODUCTION OF MAJOR CROPS (SOURCE: UN-FAO
ETC.)
Wheat is the world's largest crop in terms of nutrient requirement, followed by Corn,
Rice, Soybeans and Cotton, with the other crops much smaller by comparison.
Total World Nutrient Requirement for these 11 Major Crops in 1998 was 202 million
MT, of which Potash (Potassium, measured as the oxide K2O) is the largest, and
Nitrogen (measured as N) is next largest, with Phosphorus (measured as the
pentoxide, P2O5) third. Of the minor nutrients, Sulphur is the second largest, with a
Total World PNS Requirement for these crops of 8.5 million MT.
PROJECTED GROWTH IN WORLD CROP PRODUCTION AND CHANGE IN
CROP MIX 1998-2010
There is a clear correlation between growth of Production of the 7 Major Crop
Groups, and GDP per capita 1970-1998, which was used to project growth to 2010.
From 2000, IMF forecasts GDP growth of 3.5% pa, and UN-FAO forecasts
population growth of 1.1-1.2%, based on which, per capita GDP will grow at 2.3% pa
(versus 2.0% 1970-1998). On this basis, World Production of the Total of 11 Major
Crops is projected to increase from 4,094 to 5,007 million MT by 2010, as follows.
World Production (MT millions)
Total 11 Major Crops
Other Crops
Total 7 Major Crop Groups
Projection 2010
5,007
1,635
6,642
Average 1996-1998
4,094
1,312
5,407
Correlation between growth of share of production of wealth-related crops (Corn,
Soybeans and Canola) and growth of GDP per capita was also established, and used
to project share of total for these 3 Crops. Historical near-zero growth for Potatoes
and Sweet Potatoes, and low growth for Sugar Beet was projected to continue.
% Share of Total World Production of 11 Major Crops
100%
Sugar Cane - 1.9%
90%
Corn - 2.0%
80%
Wheat - 1.9%
70%
Rice - 1.9%
60%
Potatoes - 0.1%
50%
Sugar Beet - 0.9%
40%
Cassava - 1.9%
30%
Soybeans - 2.6%
20%
Sweet Potatoes - 0.1%
10%
Cotton - 1.9%
0%
Canola - 3.5%
Projection 2010
Average 1996-1998
FIG. 9: CHANGE IN CROP MIX - PROJECTION 2010 VERSUS AVERAGE 1996-1998 (ANNUAL AVERAGE
GROWTH RATE SHOWN IN LEGEND)
The resultant projected change in Crop Mix generally continues the trends noted
earlier. The projected global rate of growth of Production for the Total of 11 Major
Crops is considered reasonably conservative at 1.7% 1998-2010, versus 2.0 % 19701998. The projected growth rates of the wealth-related crops are significantly less
than historical. Nevertheless, growth of share of the Crop Mix for these Crops will
drive growth in PNS requirement, above growth of demand for other Nutrients.
PROJECTED GROWTH IN WORLD NUTRIENT REQUIREMENT AND
NUTRIENT MIX 1998-2010
World Nutrient Requirement for the Total of 11 Major Crops is projected to increase
from 201 million MT to 253 million MT by 2010, based on growth in Crop
Production. Other Crops included in the 7 Major Crop Groups bring the total
requirement to 334 million MT in 2010, as follows.
World Total Nutrient Requirement (MT millions)
Total 11 Major Crops
Other Crops
Total 7 Major Crop Groups
Projection 2010
253
81
334
Average 1996-1998
201
65
266
% Share by Nutrient of Total World Nurient Requirement of 11 Major Crops
Nutrient Growth Rate to 2010
100%
2,003
1,545
10,669
12,539
8,420
10,021
Ca Rqt (KT) - 2.19%
25,942
S Rqt (KT) - 1.99%
90%
32,748
80%
Mg Rqt (KT) - 1.89%
70%
60%
93,755
73,979
50%
P2O5 Rqt (KT) - 1.96%
N Rqt (KT) - 1.99%
40%
K2O Rqt (KT) - 1.88%
30%
20%
100,882
80,720
Projection 2010
Average 1996-1998
10%
0%
FIG. 10: CHANGE IN NUTRIENT REQUIREMENT MIX PROJECTION VERSUS AVERAGE 1996-1998 (ANNUAL
AVERAGE GROWTH RATE SHOWN IN LEGEND)
It should be noted that World total Nutrient Consumption is 137 million MT, which is
far below the 1998 Total Nutrient Requirement of 266 million MT. The overall
growth rate projected for Nutrient Requirement is 1.9%, which is above the 1.7%
growth rate projected for production of 11 Major Crops or 7 Major Crop Groups.
The resultant projected change in the Nutrient Requirement Mix is relatively minor,
as shown Fig. 10, however it continues the trends highlighted earlier. The projected
global rate of growth for all 6 Nutrient Requirements are shown in the sidebar. Ca
growth is largest, but from a very small base. Half of this growth is from Soybean
Production. S and N also are projected to grow at above the average rate, as two of
the high growth, wealth-related crops - Corn and Soybeans - also have relatively
large N requirements. K (Potash) is the largest Nutrient requirement, and is projected
to remain so, but has the lowest rate of growth as a result of the changing Crop Mix.
PNS REQUIREMENT - DISTRIBUTION AND PROJECTIONS
3,000
Sulphur Nutrient
2,500
Requirement
(KT)
2,000
1,500
Sugar Beet
Potatoes
Cassava
Sweet Potatoes
non-linear scale
1970
1980
1990
1996
1998
-
Canola
500
Soybeans
Rice
Cotton
Corn
Wheat
1,000
Sugar Cane
World Total S
Requirement for
these Crops
= 8,500 KT
FIG. 11: W ORLD SULPHUR NUTRIENT REQUIREMENT OF MAJOR CROPS 1970 – 1998
Looking at the total 8.5 million MT PNS Requirement for the 11 Major Crops in
more detail, Wheat is the world's biggest crop in terms of S Requirement, and Corn,
Cotton, Rice and Soybeans have very large S Requirements. Canola has a large
requirement on a unit basis, but like cotton is not a large crop.
The Global Average Annual Growth Rate of the PNS Requirement for the 11 Major
Crops was 2.5% in the period 1970 - 1998. This growth was 23% higher than growth
of Production because crops with a high Sulphur Requirement - Wheat, Corn, Canola
and Soybeans - grew at above-average rates, as stated earlier.
% Share of Total World S Requirement of 11 Major Crops
100%
Wheat
90%
Corn
80%
Cotton
70%
Rice
60%
Soybeans
50%
Canola
40%
Sugar Cane
30%
Sugar Beet
20%
Potatoes
10%
Cassava
Sweet Potatoes
0%
1998
1970
FIG. 12: CHANGE IN SULPHUR REQUIREMENT BY CROP MIX 1998-1970
Fig. 12 shows that, despite Wheat's growth in tonnage terms, its share of the total
PNS Requirement shrank slightly from 1970 to 1998, because the growth of the PNS
Requirement of Corn, Canola, and Soybeans was larger still.
4,000
44%
Sulphur Nutrient Requirement (KT)
3,500
Sweet Potatoes
3,000
Cassava
Potatoes
2,500
Sugar Beet
23%
2,000
Sugar Cane
Canola
1,500
Soybeans
1,000
500
9%
9%
4%
3%
5%
2%
-
Rice
Cotton
Corn
Wheat
Africa
Asia
Eastern NAFTA Oceania South USSR / Western
Europe
America Former Europe
Area of
FIG. 13: 1998 SULPHUR NUTRIENT REQUIREMENT OF MAJOR CROPS BY REGION
(W ORLD TOTAL S REQUIREMENT FOR 11 MAJOR CROPS = 8,500 KT)
44% of the World PNS requirement for the 11 Major Crops is in Asia, of which
China accounts for almost half (or 20% of World PNS Requirement) and India about
a quarter (or 10% of World PNS Requirement).
The Asian and North American requirements together make up 2/3 of the World
Total, though North America's requirement is mainly for Corn, Wheat and Soybeans,
with relatively little Cotton. USA has as big a PNS requirement as China, but based
on a different crop mix which is heavily dependent on Corn and Soybeans. In
Canada, the S requirement for Canola is as large as for Wheat. The South American
requirement is mainly for Soybeans, and Western Europe's mainly for Wheat.
16,000
14,093
14,000
11,168
12,000
PNS (KT)
10,000
10,669
8,000
8,420
11 Major Crops
6,000
4,000
Other Crops
2,000
3,424
2,748
0
Projection
2010
Average
1996-1998
FIG. 14: PROJECTED W ORLD PNS REQUIREMENT FOR 7 MAJOR CROP GROUPS
Total PNS Requirement for the 7 Major Crop Groups is projected to grow from 11.2
million MT to 14.1 million MT by 2010. The 2010 total comprises 10.7 million MT
for the 11 Major Crops plus 3.4 million MT for Other Crops.
S-FERTILISER SUPPLY AND MARKET POTENTIAL BY REGION
Efficiency of PNS Application is the key to a good understanding of World PNS
Market Potential. Only a portion of each element of PNS Application goes to satisfy
the PNS Requirement, and the rest is effectively wasted, or at least not utilised in the
current crop year. As a result, PNS Application in the form of Organic Fertiliser,
Deposition, Irrigation and the major Sulphur containing Fertilisers, satisfied only
about half of the average annual World PNS Requirement in the period 1996-1998, as
shown in Fig 15.
Total
34.4
Untapped Market based on
efficency of SO4 applied for S
14.1
Efficiency
(net)
35%
Untapped market
for S Fertiliser
Total
11.2
PNS Deficit
is the driver for the
Untapped Mar ket
4.9
0.9
1.5
0.8
2.4
Other S Fertiliser
Applied only to certain areas
30-50% maximum efficiency,
w hen applied for S. Efficiency
still less w hen applied for P &
N, as S then applied in excess
Portion of PNS
Application going to
satisf y Requirement
41%
3.9
4.5
50-70% leaching on portion
irrigated
1.9
>50-70% leaching / runoff
34%
SOP
24%
AS
34%
NSP
43%
Irrigation
35%
SO4 Deposition
(total Wet and Dry)
10%
Organic Fertiliser
(Crop Straw plus
Animal manure)
7.0
Organic Sulphur not readily
available for uptake as SO4
PNS Requirement
2.1
PNS Application
FIG. 15: W ORLD REQUIREMENT AND APPLICATION OF PNS - AVERAGE 1996-1998 (MT MILLIONS)
The first element of supply is Organic Fertiliser such as Crop Straw and Animal
Manure. A study published by The Sulphur Institute1 indicated that negligible PNS is
available to plants from Organic Sulphur in Animal Manure short term and long term,
as Organic Sulphur is not readily converted to sulphate for uptake by the plant. In the
case of Crop Straw, PNS absorbed by the plant and not harvested is effectively
immobilised in the Straw, so an assumption of zero net effect would be conservative
in this case. In the case of Animal Manure, there is relatively little use of it outside
China. Overall, for this market assessment, it is assumed that only 10% of PNS
applied in the form of Organic Fertiliser form goes to satisfy the Requirement.
Total Wet and Dry Atmospheric Deposition of Sulphur in the form of sulphates on
the world’s Arable Land Area is estimated as 7.0 million MT annual average in the
period 1996-1998. Sulphate Deposition (also known as Acid Rain) is a somewhat
localised phenomenon, and is far greater than average around generators such as
power stations burning high-sulphur coal, and far lower than average in most rural
areas. The efficiency of this form of PNS Application is typically better than 30%,
and reaches 45% in intensively cultivated NAFTA and W. Europe, based on 50% 70% sulphate lost due to leaching and runoff, and off-season Deposition. A report
published by The Sulphur Institute2 indicates annual S Deposition 1995-1997 for
rural areas of industrialised provinces of China of 5-10 kg/ha and 0-5 kg/ha for rural
areas of agricultural provinces: on this basis, 7 kg/ha is a reasonable average for
Arable Land in China.
The Average Deposition Rate for other parts of the World was estimated based on
available data, and is projected to decline in the developed world, Eastern Europe
and the Former Soviet Union (“FSU”). The Deposition Rate is projected flat in
China, India and rest of developing world.
PNS Application through Irrigation was estimated based on the assumption that the
application rate for the Irrigated portion of the Arable Land Area is 1/3 higher than
the Deposition Rate for that same area. This is believed to be conservative overall.
Efficiency of PNS Application by Irrigation is assumed to be 10% higher than for
Deposition, based on more than 50% - 70% sulphate lost due to leaching and runoff,
the same as for Deposition, but minimal losses from off-season Irrigation.
Globally, the majority of the remainder of the PNS Application is made up of
sulphate contained in three relatively low volume Fertilisers: Normal (Single)
Superphosphate (“NSP”), Ammonium Sulphate (“AS”), and Potassium Sulphate
(“SOP”).
The majority of the world’s NSP is produced in old plants in the FSU and China. No
growth in production capacity is expected, as no new capacity is being built for this
old technology fertiliser. (While it is assumed that there will be no shutdowns, NSP
supply may actually decrease, as Triple Superphosphate plants take up the demand.)
NSP tends to be applied for its PNS content in Oceania, Southwest Asia and South
America, but in most other areas, it is applied only for its Phosphate content. The
Efficiency of application of NSP applied for PNS is assumed to be 35-40%, but the
Efficiency is less than this when NSP is applied for Phosphate (“P”) and Nitrogen
(“N”), as PNS is then applied in excess to the PNS Requirement of the crop.
Almost all AS is now produced as a byproduct of production of Caprolactam, which
is used to produce Nylon. Based on growth of Nylon end-use markets in fibres and
plastics, and new Caprolactam manufacturing technology which produces relatively
less AS than historical, and in the case of BASF/DuPont technology, none at all,
global growth of AS Supply from this source is projected to be modest, in the range
of 1.5% for the next decade. As in the case of NSP, AS is applied for its PNS content
in certain regions, however according to some estimates, as much as 90% of Standard
Grade AS is applied only for N, as an alternate for Urea. Allowing for PNS applied in
excess and lost, the overall Efficiency of PNS Application by AS is calculated in the
range of 24%.
Most SOP is extracted from naturally occurring deposits. Its main use is for
application of Potash (“K”) to chloride intolerant crops for which Muriate of Potash
(“MOP”), the normal K Fertiliser, is unsuitable. SOP is priced at a large premium to
MOP, based on its use as a specialty fertiliser. Growth of SOP Application is
projected at GDP per capita rate, the same as the base assumption for projection of all
Nutrient requirements. However, SOP supply may increase faster as new production
comes on stream, and if so, currently high SOP pricing may come under pressure.
In summary, on this basis, PNS Application in the form of Organic Fertiliser,
Deposition, Irrigation and the major Sulphur containing Fertilisers, supplied 6.3
million MT of the average annual World PNS Requirement of 11.2 million MT in the
period 1996-1998. The unsatisfied portion of the PNS Requirement was 4.9 million
MT, and this is the driver for the Untapped Market.
The average annual Untapped World Market for S Fertiliser in the period 1996-1998
was estimated based on the assumption that the average Efficiency of Sulphate
Fertilisers is 35%, as applied worldwide. On this basis, the Untapped Market in the
late 1990s was 14.1 million MT S.
FIG. 16 W ORLD REQUIREMENT AND APPLICATION OF PNS - PROJECTION 2010 (MT MILLIONS)
Based on these projections, the total annual Untapped World Market for S Fertiliser
is projected to grow from 14.1 million MT 1996-1998 to 22.1 million MT by 2010,
equivalent to a compound annual growth rate of 3.8%.
Total
6.2
Efficiency
(gross)
Total
2.7
2.7
Untapped Market based on
efficency of SO4 applied for S
50%
Untapped market
for S Fertiliser
41%
Other S Fertiliser
50%
SOP
50%
AS
50%
NSP
55%
Irrigation
45%
SO4 Deposition
(total Wet and Dry)
10%
Organic Fertiliser
(Crop Straw plus
Animal manure)
1.4
0.7
0.3
0.4
0.1
Applied only to certain areas
30-50% maximum efficiency,
w hen applied for S. Efficiency
still less w hen applied for P &
N, as S then applied in excess
1.0
0.5
50-70% leaching on portion
irrigated
>50-70% leaching / runoff
Organic Sulphur not readily
available for uptake as SO4
PNS Requirement
0.2
1.2
PNS Application
FIG. 17: NAFTA REQUIREMENT AND APPLICATION OF PNS - PROJECTION 2010 (MT MILLIONS)
NAFTA is a region of particular significance for S Fertiliser, as it accounts for 23%
of the World PNS Requirement. Fig. 17 shows that the annual Untapped Market for S
Fertiliser in this region is projected to grow to 2.7 million MT by 2001. This
represents a 12% share of the World total Untapped market in 2001, or only half of
NAFTA’s share of the World PNS Requirement, partly as a result of the relatively
large use of AS and other S Fertilisers such as Elemental Sulphur, and also because
of the high Efficiency of PNS Application in this region.
Total
9.9
Efficiency
(gross)
Untapped Market based on
efficency of SO4 applied for S
4.3
35%
Untapped market
for S Fertiliser
35%
SOP
35%
AS
2.3
35%
NSP
50-70% leaching on portion
irrigated
0.5
40%
Irrigation
>50-70% leaching / runoff
0.9
30%
SO4 Deposition
(total Wet and Dry)
Organic Sulphur not readily
available for uptake as SO4
1.5
10%
Organic Fertiliser
(Crop Straw plus
Animal manure)
Total
2.9
1.5
Applied only to certain areas
30-50% maximum efficiency,
w hen applied for S. Efficiency
still less w hen applied for P &
N, as S then applied in excess
0.8
0.2
0.3
PNS Requirement
PNS Application
FIG. 18: CHINA REQUIREMENT AND APPLICATION OF PNS - PROJECTION 2010 (MT MILLIONS)
China is the other region to be reviewed in more detail, as it accounts for 20% of the
World PNS Requirement, only slightly smaller than NAFTA. Fig. 18 shows that the
annual Untapped Market for S Fertiliser in China is projected to grow to 4.3 million
MT by 2001, close to 20% share of the World total Untapped Market. Key
differences from the NAFTA region are the relatively large use of NSP and Organic
Fertiliser, the overall lower contribution of Deposition, and the lower Efficiency of
PNS Application.
25,000
Total 22,074
20,000
100%
848
947
1,557
Oceania
1,855
Eastern Europe
90%
80%
1,686
15,000
Total 14,083
2,748
1,051
1,321
10,000
70%
USSR / Former
Area of
60%
South America
1,022
1,430
50%
40%
Africa
12,322
30%
Western Europe
5,000
20%
8,291
NAFTA
-
10%
0%
Asia
1996-1998 / Average
2010 Projection
1996-1998 / Average
2010 Projection
FIG. 19: S FERTILISER APPLICATION (BASED ON SO4) REQUIRED TO SATISFY UNSATISFIED PNS
REQUIREMENT (KT S. LEFT CHART) AND SHARE SHIFT (%, RIGHT CHART)
The Untapped Market for S-Fertiliser is projected to grow fastest in NAFTA and
Western Europe, as a result of above average increase in the PNS Requirement and
decrease in Deposition (Acid Rain). However, by far the largest Untapped Market is
projected to be in Asia.
REALISATION OF MARKET POTENTIAL FOR PNS
As stated earlier, if sufficient PNS is not available to the plant, protein formation will
be sub-optimal, and plant growth and crop yield will suffer. This market assessment
showed that the global and regional supply of PNS is actually less than the
requirement of crops grown. On this basis, crop yields must already be less than
optimal, yet sales of Sulphur Fertilisers remain quite small in most parts of the world
The relatively low utilisation of Sulphur Fertilisers is related to several factors which
influence realisation of the market potential for PNS, including crop response to
Sulphur, soil type, farming practices, economics, fertiliser product design and
distribution channels. These factors can only be discussed briefly in a paper of this
scope.
Crop Response To Sulphur
Based on a limited study of the literature, most field trials have shown the expected
correlation between availability of sufficient PNS in the soil, and crop yield and/or
quality. However, typically, such favourable trial results only served to increase the
level of awareness of the value of PNS at the local level.
By way of example, studies underway in Argentina for the past three years have
shown statistically significant responses to PNS in wheat and soybeans, which have
unequivocally established the economic case for Sulphur fertilisation. Partly as a
result of these trials, PNS has gone from an unknown to the most widely discussed
plant nutrient in Argentina, yet the global impact has been limited.
Soil Type
Sandy soils, or soils which have a low content of organic matter, and other soils
which are easily leached, typically require application of PNS. Tropical soils, when
cultivated, lose their nutrients rapidly and require applications of all nutrients
including PNS. Soils which have had heavy applications of PNS in the past, from
sulphate containing fertilisers or deposition, may require little or no PNS initially,
however even these soils will require PNS to be applied after extensive cropping,
which is the case in much of the USA today.
Farming Practices
Modern agronomy is spreading throughout the world, and fertilisation is increasingly
based on nutrient content of the soil and plant requirements for those nutrients. As a
result, there is increasing recognition of the role of PNS in high yielding agriculture.
Economics
Typically, the economic case for applying Sulphur Fertiliser is based on
demonstrated increases in crop yield and value under local conditions, for example
higher yield and oil content of soybeans. However, the decision whether to apply
Sulphur Fertiliser in any particular case, and at what rate, depends on a number of
additional factors, including weather and market conditions for the crop in question.
For example, if there is not sufficient moisture in the soil, the presence or absence of
PNS or other nutrients in the soil will not effect yields much.
Fertiliser Product Design
The major fertilisers containing PNS are NSP, AS, SOP, elemental Sulphur and
Nitrogen solutions. The solid fertilisers are available in various physical forms,
including granules, crystals, and finely divided powders. None of these fertilisers,
however, is readily available in all forms to farmers in all regions of the world.
For it to be absorbed by plant roots, PNS must be made available in the form of
sulphate, which may either be contained in the fertiliser, or formed by oxidation of
elemental sulphur contained in the fertiliser. In general terms, the conversion of
elemental sulphur to sulphate is a relatively slow process, whereas sulphate leaches
from the soil relatively quickly. This suggests that significant opportunities should
exist in the marketplace for fertiliser products designed to address requirements for
PNS and other nutrients.
Distribution Channels
In parts of North America, it is routine for farmers to purchase fertiliser customformulated to meet the nutrient needs of a particular field, based on nutrient content
of the soil and nutrient requirements of the crop. This is economically feasible, since
the distribution system exists whereby fertilisers such as urea, TSP, MOP and AS are
made available in the form of granules for local blending. As well, elemental sulphur
is available in various forms.
In most parts of the world where heterogeneous blending is not the norm, some
fertilisers such as AS may only be available in a non-granular form. In such markets,
farmers may apply an individual fertiliser direct, or as a component of a blend made
up on the spot. More rarely, the dealer may produce a compound fertiliser by
compaction or solution. In many cases, a Sulphur Fertiliser is not available. In other
cases, if a Sulphur Fertiliser is available, applying it for PNS means applying too
much of the major nutrient contained in that Sulphur Fertiliser.
A further constraint on the ready availability of PNS worldwide is that the Sulphur
Fertilisers (NSP, AS, SOP, elemental Sulphur and Nitrogen solutions) are generally
not manufactured, or marketed on the global scale, by the major fertiliser producers.
In comparison, the major N, P and K fertilisers (urea, TSP and MOP) are produced
and marketed on a global scale, although interestingly, few of the major producers
offer fertilisers containing more than one of the three major nutrients.
CONCLUSIONS
The untapped market for PNS represents a major opportunity for increased fertiliser
sales. However, low awareness of the value of PNS and limited availability of
Sulphur Fertilisers in many parts of the world, have held back the development of the
market for Sulphur Fertilisers to date.
REFERENCES
1. Eriksen, J.: “Animal Manure as S Fertiliser”, Sulphur in Agriculture Volume 20, page 27
(1997)
2. The Sulphur Institute: “The Role of Sulphur Fertilizer for Sustainable Development of
Chinese Agriculture”, A Comprehensive Report on Plant Nutrient Sulphur and Sulphur
Fertilizer Use and Research in China, page 31 (1999)
SPEAKER’S NOTES
1. AGENDA
 today we are going to talk about PNS – not pre-nuptual stress – but Plant Nutrient
Sulphur. There’s a lot of material, so I’ll be moving through it quite quickly.
2. PNS
 Not well known but S is essential
 Harvested parts of plants contain 0.1 – 0.5% S typically, and by definition these
are the parts removed from the soil
 Absorbed as sulphate, from S oxidation or from deposition as acid rain
3. DEMAND DRIVERS
 First we’ll look at demand drivers for crops, then for crop nutrients
4. WORLD POPULATION
 World population is increasing, and GDP is increasing even faster
5. WORLD ARABLE LAND
 But according to the Food and Agriculture Organisation of the UN (UN FAO) –
which was the source of much of our data – Arable Land Area is not increasing,
so yields per hectare have had to increase in response to growing demand
 We looked at 7 Major Crop Groups and used date on 11 Major Crops for the
purposes of this study.
6. INDEX OF GLOBAL PRODUCTION OF CROPS
 We indexed global production of crops and livestock products to 1.0 in 1970,
when GDP per Capita (red broken line, right hand axis) was just over $1000.
 While GDP grew by a factor 6 – 7 to 1998, the total of 7 Major Crop Groups
grew about 70%.
 Total Meat Production more than doubled, however, in response to demand for
protein from the increasingly affluent population.
 Interestingly, Poultry (Chicken) increased by a factor of 4 while Beef and Milk
products underperformed the 7 Major Crops due to dietary factors in different
parts of the world.
 In response to demand of more affluent western consumers for “healthy”
foodstuffs, production of Soybeans and Canola increased almost as fast as
Chicken.
7. AVERAGE CROP YIELD
 Again, yields had to increase to meet demand since arable land area did not
increase.
 These five countries are all large Agri producers which together produce about
50% of world total of the 7 Major Crop Groups, so they account for about 45% of
all Nutrient Requirements. For example, yields about doubled in China and India,
and so did the Nutrient Requirement
8. CROP PRODUCTION AND NUTRIENT REQUIREMENT PROJECTIONS
 We’ll now look at growth in Crop Production and Nutrient Requirements in the
past 30 years, and projected for the next decade.
9. WORLD PRODUCTION OF 11 MAJOR
 World Production of 11 Major Crops grew 2% pa from 1970, however the Crop
Mix changed, with Corn and other Cereals growing at above average rates, and
Canola and Soybeans far above average, in response to growing demand for
protein and healthy foodstuffs, respectively.
10.WORLD USE RPOFILE OF CORN
 The World Use Profile of Corn and 7 Major Crop Groups shows how Corn
(Maize) demand is driven by demand for animal feed to produce protein.
11.1998 WORLD NUTREINT REQUIREMENTS
 This shows Nutrient Requirements 11 major Crops, which totalled 202 million
MT in 1998, including 8.5 million MT of Sulphur.
 Some bulky crops such as Sugar Cane, use relatively little nutrients, whereas
other crops such as cotton have a relatively large nutrient requirement.
12.WORLD CROP PRODUCTION AND CHANGE IN NUTRIENT MIX .. 2010
 In order to project Nutrient Requirement to 2010, we projected world crop
production based on a projection of GDP per capita.
 IMF forecasts 3.5% GDP growth from 2000, and UN-FAO forecast world
population growth of 1.1 – 1.2%, which combine to a projected 2.3% growth in
GDP per capita.
 Shown here are the resultant projection of growth and changing crop mix, which
generally follow the pattern of the past thirty years.
13.WORLD NUTRIENT REQUIRTEMENT AND CHANGE IN MIX … 2010
 The resultant projection of world nutrient requirement shows PNS growing at the
same rate as N, but above K and slightly above P.
 It should be noted that total nutrient consumption is 137 million MT, which is far
below the 1998 total nutrient requirement of 266 million MT.
14.PNS REQUIREMENT – DISTRIBUTION
 Now we’ll look at the PNS requirement in more detail
15.WORLD PNS REQUIREMENT OF MAJOR CROPS AND EFFECT
 Looking at the 8.5 million MT PNS requirement of 11 Major Crops in more
detail, growth was 2.5% pa from 1970 to 1998, as crops with a high PNS
Requirement grew at above average rates, as explained earlier.
16.1998 PNS REQUIRMENT OF MAJOR CROPS BY REGION
 On a regional basis, Asia and NAFTA together account for 2/3 of World PNS
Requirements, but obviously the use profiles are very different.
17.PROJECTED WORLD PNS REQUIREMENT FOR 7 MAJOR CROP GROUPS
 Total PNS requirement is projected to grow from 11.2 to 14.1 million MT in
2010.
18.S-FERTILISER SUPPLY AND MARKET POTENTIAL BY REGION
 The next slides show how the PNS requirement translates into Fertiliser demand
in the World, NAFTA and China.
19.WORLD REQUIREMENT 1998
 Efficiency of PNS application is the key to a good understanding of world PNS
Market Potential
 Only a portion of each element of PNS application goes to satisfy the PNS
Requirement, with the rest wasted or not utilised in the year of application.
 As a result, PNS applied as Organic Fertiliser, Deposition (acid rain), Irrigation,
and the Major Sulphur Containing Fertilisers (NSP, AS and SOP) satisfied
slightly more than half of the world PNS Requirement as shown.
 The untapped market for S Fertiliser was 14 million MT based on an efficiency of
35%.
20.WORLD REQUIREMENT 2010
 This is expected to grow to 22 million MT by 2010, equivalent to an annual
growth rate of 3.8%.
 The high growth results from no growth overall in the other existing sources of
PNS