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Nutrients are essential for human, animal, and plant life: nitrogen (N), phosphorus (P), and potassium (K) are the three main nutrients. Fertilizers, which contain one or more of these nutrients, help maintain soil fertility, improve crop development, and increase crop yield.
Each time farmers harvest grain, vegetables or fruit, they remove essential nutrients from the soil. Natural replacement rates are slow and unable to match the intense productivity of modern agriculture. Adequate fertilization is of the upmost importance: between 30% and 50% of crop yield is attributable to nutrient inputs.
N, P, and K each performs unique biological functions; no single nutrient can replace another and there are no substitutes:
Nitrogen ensures the production of new cells and enzymes, is responsible for leaf and stem growth, and is a major component of chlorophyll, which gives plants green pigments.
Phosphorus, in the form of phosphate (P2O5), promotes root development, encourages root growth and blooming, and is critical to the photosynthesis process; phosphate is also an important ingredient in livestock feed.
Potassium, in the form of potash (K2O), encourages uptake of water, increases plant resistance to drought and disease, and activates enzymes significant for plant growth.
Fertilizers will be an essential part of producing more food efficiently: global population keeps growing, arable land is limited, and an expanding middle class is shifting to protein-based diets.
The United Nations projects world population to reach 9.7 billion by 2050, from a total of 7.3 billion in mid-2015. Africa alone will account for over half the projected worldwide population increase of 2.4 billion people by 2050, more than doubling the continent’s current population to 25% of the world’s total. Sub-Saharan Africa today accounts for less than one percent of total world fertilizer consumption, even though world population growth will be dominated by that region of the world and per capita caloric intake there, together with South Asia, is among the lowest in the world.
The Food and Agriculture Organization of the United Nations (FAO) warns that world food production will need to rise by approximately 70% by 2050; food production in the developing world will need to double in that timespan. FAO attributes this need to:
Increased food production will come from higher crop yields and an expansion in harvested land, both of which will necessitate greater fertilizer use. At a time when intensive cultivation practices are depleting soil fertility, crop yield improvements continue to decelerate. Most land is of marginal quality, where the need for nutrients from fertilizers will be even greater.
Considering these trends, the International Fertilizer Industry Association (IFA) is forecasting medium-term growth in fertilizer demand of about 1.7% per year, with total fertilizer demand exceeding 200 million mt of N, P2O5 and K2O by 2020. CRU forecasts long-term growth at about the same rate or higher. Both IFA and CRU forecast higher growth rates for phosphate and potash at more than 2% per year.
Unlike other commodities – such as iron ore, copper or coal – fertilizers are linked to the essential daily human need to eat; demand is, therefore, relatively stable and inelastic. Fertilizer consumption is not affected greatly by the general business cycle or infrastructure development trends.
In order to meet this growing demand for fertilizers, new production capacity will be needed around the world. Africa will, in particular, be a region where production will need to be added: it has the natural resources needed to make fertilizer, it is already massively under-fertilized, and it will account for most of the population growth expected the rest of this century.