The Arab World

The Arab world is in turmoil because of all kind of issues going from social unrest to ethnic strife, religious clashes and environmental protest. And this is affecting one of the key sources of fertilizer production. The Arab countries are key suppliers of fertilizer raw materials. The Arab countries currently account for some 14-15% of the global natural gas production, compared to an 8 percent in 1990 and 2 percent in 1970. Morocco and Western Sahara is the third largest phosphate rock producer, Tunisia is the fifth, Jordan ranks eight, Egypt nine, Syria twelve, and also Algeria has a significant domestic output. Egypt has the eight biggest ammonia capacities, and also Saudi Arabia, Algeria, Qatar, Oman and Abu Dhabi have large capacities. Egypt, Saudi Arabia, Qatar and Libya are important urea makers. Jordan is the sixth largest global potash supplier. Saudi Arabia and Abu Dhabi are key sulphur suppliers.

Demonstrators protesting pollution from an Egyptian nitrogen plant partially owned by Agrium, blocked a main road to the northern port of Damietta, which effectively shut down operations. The port has reopened, but the closure cost, according to Egyptian authorities was of USD 5.8 million a day. The country’s GDP is falling, factories are closing, and the nation’s finances are worsening. Egypt’s fertilizer producers benefit from cheap access to raw materials such as phosphate rock and natural gas. Egypt accounts for roughly 3% of global urea production and 8% of global urea exports.

In Tunisia, protests affected the phosphate rock supply to the Gabes plant, limiting the DAP production at their 330,000 tpa plant. TSP output at M’dhilla remains down with GCT starting about a one month maintenance programme recently due to the civil unrest that has interrupted the supply of phosphate rock to the facility, forcing its closure. In the early December, force majeure on sulphur imports was still on place.

In the shifting sands of the Middle East and North Africa nobody really knows what is going to happen. Not all looks bad. In their last Montreal meeting on May 2011, the IFA established that “on a global basis, the net addition to merchant grade acid capacity is estimated at 1 Mt P2O5, of which 0.86 Mt will come from two large stand-alone units in Tunisia and Jordan. In the 2014-15 there are expected the commissioning of large-capacity phosphate projects planned in Morocco. Saudi Arabia will become a key DAP supplier. But there are enough reasons to be concerned.

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