October 2008

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This presentation aims to trace the movements of nitrogen, phosphorus and potassium in fertilizer materials and crops, from their origin at the production site or mine; then to examine the losses, the recycling of the nutrients, and the means for reducing the losses.

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In the early 1900s, a means to fix atmospheric di-nitrogen and convert it into a form that is available to plants, was discovered. It is this discovery of producing nitrogen fertilizers that permits agriculture to feed today's world population.

Almost all nitrogen fertilizers are produced from ammonia, phosphate from phosphate rock and potassium from potash ores. Phosphate and potash deposits occur in varying quality and quantity in many parts of the world but large-scale mining is carried out in only a few areas. As the high quality reserves become exhausted, increasing prices will be necessary to justify recovery from less economical sources.

The location of the production of ammonia is favoured by the availability of low-cost natural gas or coal.

Average annual production (2004 to 2006) of ammonia, phosphate rock and potash, amounted to 202 million tonnes (Mt) of nutrient.

Urea (46% N content on average) accounts for over half of total N fertilizer production and ammonium phosphates for over half of the P fertilizer production. Potassium chloride (60% K2O) accounts for almost 95% of total K production.

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Slide 3.

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Ammonia is produced in 68 countries; 7 countries account for 2/3 of world production.

In China, most of the ammonia is produced from coal while India still uses naphtha. However, several facilities in India can switch to natural gas.

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At the global level, natural gas is the feedstock for two thirds of the ammonia capacity, and coal for 27%. The remaining 6% uses other feedstocks such as naphtha and petroleum products.

Between 2007 and 2012 some 50 new ammonia units are planned to come on stream, half of which will be located in China.

According to IFA’s 2008 survey, these new units will add close to 25Mt of ammonia capacity and about 9Mt will come from revamping and upgrading existing facilities.

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Phosphate rock is produced in 29 countries, 9 countries account for 87% of world total.

Global production of phosphate rock in 2007 was recorded at 176.1Mt an increase of 4.6% over 2006. China contributed about three quarters of the net 7.8Mt global increase in phosphate rock production.

Approximately 80% of the mined phosphate rock is used to produce phosphoric acid and about 85% of the phosphoric acid coming from high quality phosphate rock is utilized to manufacture high-analysis phosphate fertilizers.

Global production of MAP, DAP and TSP (processed phosphates) grew by 5.5% totalling 25Mt P2O5 in 2007 subsequently, world demand for phosphate fertilizers grew by 4.5% over 2006.

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Potash sources are even more concentrated. Potash is produced in 14 countries and 7 countries account for 92% of the world output.

In 2007, global potash production was 34.1Mt of K2O.

Production rose in almost all producing countries with the exception of Brazil and Israel due to operational problems.

Canada, Russia and Belarus contributed 88% of the increase in the 2007 production over 2006.

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Slide 7.

_______________________________ Fertilizers are consumed in almost every country in the world

and 5 regions account for 90% of the world consumption.

World fertilizer consumption is estimated at 169.4Mt of nutrients in 2007/2008. Demand for nitrogen increased by 4% and phosphate by 3% while potash increased by 6%.

The strongest relative growth is seen in Latin America, and is anticipated in Eastern Europe, Central and East Asia.

The geographical pattern of fertilizer consumption is determined by the size of the populations, their standard of living, the availability of fertile land and the climatic conditions. The inter-regional movements of fertilizers are, therefore, determined largely by these physical and demographic factors.

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Slide 8.

__________________________________ Inter-regional movement of plant nutrients in fertilizers represents one

third of total world fertilizer consumption.

Inter-regional movement of nutrients in fertilizers/raw materials account for 81% of the total while nutrients in cereals and soybeans, the main crops involved, account for 19%. Nutrient movement in animal products is comparatively small.

N: 2/3 of the N inter-regional movement comes from fertilizers/raw materials and 1/3 from crops.

- ¾ come from urea and ammonium phosphate- 17% from ammonium nitrate- 8% from NPKs

In the case of P and K, some 90% of the transfer is accounted for by fertilizers/raw materials.

P: - 77% come from ammonium phosphates- 14% from TSP- 9% from NPKs

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Slide 9.

Net Import/Export: Plant nutrients in fertilizers (Average 2004-2006)

Net Exports: Plant nutrients in fertilizers Region Nitrogen Phosphate PotassiumEast Europe and Cen. Asia 66% 15% 55%North America Importer 18% 27%West Asia 18% 9% 15%South America 5% Importer ImporterAfrica Importer 57% ImporterOthers 11% 1% 3%

Net imports: Plant nutrients in fertilizersRegion Nitrogen Phosphate PotassiumSouth and East Asia* 46% 51% 67%West and Central Europe 16% 25% 2%North America 32% Exporter ExporterSouth America Exporter 22% 24%Africa 1% Exporter 4%Others 5% 2% 3%* Including China

Western and Central Europe: The region is a net importer of nutrients from N and P fertilizers and receives substantial quantities of nutrients in imported crops.

Eastern Europe and Central Asia: Eastern Europe is the largest world net exporter of fertilizer nutrients, especially nitrogen and potassium.

North America: The USA is the largest supplier of DAP and Canada of potash. The region also exports all three nutrients in crops.

Latin America: The region is a net exporter of nutrients in crops. Much of the nitrogen surplus is accounted for by soybean exports from South America and ammonia exports from Trinidad to North America.

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Net import/export of plant nutrients in cereals and soybean

Net exports: Plant nutrients in cereals and soybeanRegion Nitrogen Phosphate PotassiumNorth America 42% 53% 44%South America 56% 44% 55%Others 2% 3% 1%Net imports: Plant nutrients in cereals and soybeanRegion Nitrogen Phosphate PotassiumAsia (all) 50% 51% 50%West and Central Europe

29% 20% 30%

Africa 12% 18% 11%Others 9% 11% 9%

Africa: Regional fertilizer consumption and crop yields are very low. The high positive phosphorus balance is accounted for by exports of phosphate rock, fertilizers and intermediates, mostly from North Africa. The region imports quantities of nutrients in crops that are substantial in relation to total plant nutrient consumption, but very few, if any, of the nutrients in these imported foods are recycled.

West Asia: Most of the countries have large areas that are semi-arid, on which fertilizer consumption is low. Fertilizer use is near the economic optimum in most irrigated areas. The region is an important exporter of N,P and K, attributable to the natural resources existing in the region.

South Asia: The main concern in the region since 1960 has been food security. Fertilizer consumption is high but often still below the economic optimum and unbalanced in favour of nitrogen. Domestic production of N and P fertilizers is high, based partly on imported raw materials. All potash has to be imported.

China: As in South Asia, the main concern for several decades has been food security. There is a policy of self-sufficiency in fertilizer nutrients, although most of the potash requirement has to be imported. Fertilizer consumption is unbalanced in favour of nitrogen. The country receives significant quantities of all three nutrients in imported agricultural products but their proportion of the total nutrient supplies is relatively small.

East Asia (other than China): Fertilizer consumption is close to the economic optimum in most countries of the region. The region imports a large proportion of its phosphate requirements and all the potash. The region receives substantial quantities of nutrients in imported agricultural products.

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A typical processing loss during conversion of ammonia into urea is 4%. A typical processing loss in the conversion from phosphate rock via phosphoric acid to DAP is about 6%. For potash there are virtually no processing losses.

In developed countries distribution losses are less than 1%. Losses from bagged fertilizers are negligible (0.5%) but losses from bulk fertilizers are slightly higher.

Recommendations for reducing fertilizer losses during their distribution are given in the UNEP/IFA publication "Mineral Fertilizer Distribution and the Environment" (2001) and the FAO/IFA publication "Fertilizer Retailing Guide" (2002).

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Under temperate climatic conditions, on average, a cereal crop takes up 50 to 70% of the applied N in the year of application; the coefficient of utilization varies widely depending on a number of factors. Under less favourable conditions, the coefficient of utilization is much lower. Of the quantity applied, about half is removed from the field as harvested crop.

The remainder of the nitrogen is contained in soil organic matter or is lost by volatilization as ammonia, by denitrification to di-nitrogen or nitrous oxide gases, or it is leached as nitrate.

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N: The average recovery of nitrogen in research plots was 46% in rice, 57% in wheat and 65% in maize. The few available on-farm studies suggest that recovery values are more commonly in the 30% to 40% range. There is a wide variation among farmers.

P: The most common recovery rates of phosphorus during the year of application range from 10 to 35% of the phosphorus applied. Under favourable growing conditions, most agricultural crops recover 20 to 30% of applied phosphorus during the growing season. Much of the remainder accumulates in the soil and, over time, it may be recovered by subsequent crops. Small amounts may be lost through runoff or leaching.

K: The average recovery rate of potassium is estimated to range from 40 to 50% in the year of application. On soils with low potassium fixation potential, with good management and at relatively low potassium rates, a recovery of 50 to 60% may be achieved during the year of application, the remainder being stored in the soil. Small amounts may be lost, dissolved in drainage water.

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Post-harvest losses of crops, during their storage, transport, transformation and distribution, are substantial. Losses of about 10 to 15% in cereals and grain legumes are quite common. In some regions of Africa and Latin America, losses of up to 50% of harvested produce have been found.

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Slide 15. Text

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In view of the large quantities involved globally, inefficiencies in the use of fertilizers represent a substantial economic loss. For example, the annual world consumption of urea amounts to about 50 Mt of N. Assuming a farm price of US$ 500 per tonne of 46% N urea and an overall loss of 20% during application, the economic loss would amount to some US$ 50 billion. Hidden costs include possible negative impacts on the environment.

The present trend is towards reduction of these losses, however, there is still much room for improvement.

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The increased use of nitrogen fertilizers has been essential to the doubling of global food production over the past 50 years. However, this increased global N input has resulted in a substantial increase in the quantity of reactive nitrogen circulating in the various compartments of the global nitrogen cycle.

From an environmental perspective, nitrate is the N form of greatest concern notably as regards water pollution while ammonia and nitrous oxide are the most relevant gasses.

Nitrous oxide is a GHG with a strong global warming potential. The global warming potential of 1 kg of nitrous oxide is equivalent to that of approximately 300 kg of carbon dioxide. Nitrous oxide emissions induced by manufactured fertilizers are estimated to be about 1% of the fertilizer nitrogen applied.

Most phosphorus not taken up by the crop is held in the soil. Small quantities may be lost through erosion and run-off. Very small quantities are sufficient to promote algal growth and, in extreme case, eutrophication.

There may be a small loss of potassium through dissolution in drainage waters, especially if the application is excessive, but it has no known adverse environmental impact.

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In the EU-15 countries, a strong correlation has been found between the nitrogen balance surplus and the stocking density. In Germany, for example, the coefficient of correlation (r2) between the nitrogen balance and the stocking density is 0.96 (EFMA, 2004).

In France, the problem of nitrate in drinking water is most pronounced in the regions of the west and north, such as Brittany, due to the concentrations of large-scale livestock-raising facilities.

In China, very high levels of nitrate have been found in soils under horticultural crops on various sites in northern China, due to the application of high rates of manures together with the over-application of manufactured nitrogen fertilizers (Xiaotang et al., 2005).

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In France, manures account for about one-third of the nitrogen applied to crops. Approximately half the cattle manure is excreted in the field and cannot be collected. The average losses that occur during the housing of the animals and in the storage and spreading of the manure, with wide variations around the means, are 50% for cattle, 50 to 70% for swine (manure and slurry respectively), and 32 to 60% for poultry. In view of the predominance of cattle manures, the overall average loss is probably about 50% (CORPEN, 2006).

According to a study carried out by the European Commission, in the EU-15, 90% of the total ammonia emissions are attributable to agriculture, the livestock sector contributing 74% and manufactured fertilizers about 10% (EFMA, 2004). In France, agriculture accounts for 97% of the emissions of ammonia, livestock accounts for 78% and fertilizers for 19% (CORPEN, 2006).

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About 60% - 90% of N and P ingested by animals and almost all of the K are excreted in faeces and urine.

Manures not only contain plant nutrients, they also contain organic matter that helps improve soil structure, reduces soil erosion, helps to store moisture, provides fixation sites for certain plant nutrients and a source of carbon and energy for microbial activities.

The world total livestock excreta in 1996 amounted to 94 Mt of N, 48 Mt of P2O5 and 27.4 Mt of K2O. These figures compare with the 96 Mt of N, 39 Mt of P2O5 and 28 Mt of K2O (2005/06-2007/08) currently applied in manufactured fertilizers.

56% of the nitrogen, 50% of the phosphorus and 70% of the potassium came from cattle. Swine and poultry accounted for 10% and 9% respectively of total nutrients. The rate of recovery of excreta as manure from cattle was estimated to be about 30%, but nearly 80% for housed swine and poultry (Sheldrick et al, 2003).

Good agricultural practices can build up soil organic matter even without application of manures, but integrated plant nutrient management, combining all available nutrient sources, is the way to go to optimize the agronomic, environmental and economic performance of agricultural systems.

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In the EU-15 in the early 2000’s, about 86% of all recycled organic waste was generated on the farm; 61% from animal wastes and 25% from crop residues. 7% of the remainder came from industrial wastes and 7% from urban wastes, including sewage sludge.

In Latin America such as Argentina, despite the large quantities of manure produced by the livestock sector, the use of manure is restricted. Livestock production is largely on rangeland. Though a large number of animals exists in Brazil, it is estimated that only about 10% of the nutrients in manure is recycled to crops, while in Mexico, most of the manure application is on horticultural crops.

In most of Africa, soils are low in organic matter and manure application is beneficial. Unfortunately, most of the manures are used as a source of energy and as construction materials. Even in the Republic of South Africa, only 3 to 4% of the total nutrients are applied through manures.

In India, the proportion of cattle manure available for fertilization purposes has decreased from 70% of the total produced in the early 1970s to 30% in the early 1990s. Most of the collected manures are used as fuel.

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In the early 1950s, nutrients from organic sources supplied over 90% of the total nutrients applied to farmland in China and the average yield of wheat was 638 kg/ha and 2,930 kg/ha for rice.

A rapidly growing population required increasing agricultural production, in particular through higher yields. Manufactured fertilizer production and use were promoted.

Nitrogen fertilizer consumption increased from about 1 Mt N in 1960/61 to almost 30 Mt N in 2005/06 and the average yield of wheat in 2005/06 was 4,252 kg/ha, and the rice yield was 6,308 kg/ha.

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Slide 22. CHINA

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The total nitrogen content of human and animal excreta in 2000 amounted to 14.2 Mt. An investigation in 18 Chinese provinces indicated that, on average, about 29% of the nitrogen from wastes was recycled in agricultural production systems.

Manure is applied to 81% of the vegetable area and to 77% of the fruit trees.

Many farmers supplement manure applications with heavy dressings of manufactured nitrogen fertilizers. As a result, high levels of nitrate accumulation in the soils of orchards and vegetable plots have been found.

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Nutrient losses from the livestock sector can be reduced by improvements in the feed conversion rates of animals and by proper handling and storage of manures.

In France, over the past thirty years, the consumption indices for poultry have fallen by 20 to 30%, according to the species. Sixty percent of the improvement is attributed to breeding, the rest to nutrition.

At present, there are several developments, through both feed and livestock, aimed at improving the efficiency of nitrogen and phosphorus use. There are several known physical measures that reduce substantially the emissions of nitrogen during the storage and application of manures.

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In many developed countries, yields have tended to increase steadily during the past 20 years without significant increases in nitrogen fertilizer use.

These improvements can be attributed to environmental regulations or incentives, to improved technologies and techniques of fertilizer application, to better cultivation practices, to improved crop varieties and to better performing products.

Unfortunately, in most developing regions, nitrogen use efficiency tends to decline.

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One of the challenges faced by the fertilizer industry is to belie the belief that the industry is only interested in increased profits through unwarranted fertilizer sales and farmers over-supply nutrients to ensure high yields resulting in excessive losses to the detriment of the environment.

The concept of Fertilizer Best Management Practices is not a new one. The Potash and Phosphate Institute (PPI) defined BMPs as those practices which have been proven in research and tested through farmer implementation to give optimum production potential, input efficiency and environmental protection.

Thus, to gain back public confidence, as part of the solution, the widespread adoption of fertilizer best management practices should be encouraged.

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While many techniques for reducing nutrient losses are known, the communication of this information to the world's farmers is a major undertaking.

Communication and its implementation to the hundreds of millions of small-scale farmers, especially in developing countries, often with limited education, is a major challenge.

In these countries, there are many constraints to the adoption of improved practices. Infrastructures are often poor, prices for the produce are low, capital is difficult to obtain and many farmers do not have the financial means to purchase inputs.

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SUMMARY

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Apart from adverse environmental impacts, the avoidable loss of any nutrient is an economic waste. Management practices that minimize the losses of fertilizer nutrients applied in agriculture are continuously being refined. Continuing improvements in the feed conversion rates of nutrients by animals reduce nutrient excretion. Recommended practices for the storage and application of manures reduce emissions considerably.

Large-scale commercial farmers are well informed about appropriate practices for reducing emissions and most of them implement recommended practices. In any case, it is in their economic interest to do so. However, the transfer and adoption of this knowledge to the hundreds of millions of other farmers is an immense task.

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