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22 April 2024

Fertiliser demand 'will never drop'

By Nissar Hoath

Fertiliser demand will never drop and the current global slowdown has little impact on the industry compared to other sectors, said a senior official from the Ruwais Fertilizer Industries (Fertil), a subsidiary of Abu Dhabi National Oil Company (Adnoc).

Fertil General Manager Mohammed Rashid Al Rashid told the second annual Middle East Fertiliser Symposium organised by World Refining Association in Abu Dhabi until a situation arises when the whole world is flooded with food surpluses, fertiliser demand will never drop and will always have a rising curve.

"Market forces always play a balancing act. Demand increases sharply when the prices drop. This, in turn, works to increase the prices again. So we are not worried," he said while referring to a recent drop in fertilizer prices.

Referring to the global economic crisis and its impact on the industry, Al Rashid said: "The prevailing economic issues should be dealt within a global perspective. Adopting a regional or country specific approach will not work. Human welfare and development need to be considered from the point of view of the best utilisation of available resources.

"We need to interact more vocally with our counterparts elsewhere. We need to utilise global forums such as the World Economic Forum more effectively – to lead to positive solutions. Many brains working together work better than one alone."

He said it was a temporary phase and will not last long, and "we have to brainstorm collectively to reach the right solutions. Our immediate strategy is the trimming of expenditures. We have to be cost effective and utilise available resources in the best possible manner".

Elaborating on bio-fuels, Al Rashid said it was good to see more and more alternative fuels are explored. However, he was against diverting agriculture produce for bio-fuels. He said: "Diverting agricultural produce for bio-fuels production is not the right strategy. The basic needs of the hungry masses should be met first. You cannot create the situation where people revolt due to food scarcity."

On the future plans for Fertil, Al Rashid said from a cost point of view, it was the right time to construct new fertilizer plants because after three years or less, product prices will "undoubtedly increase".

The Fertil ammonia plant in Ruwais produces 1,500 metric tonnes of urea per day, and during the past 24 years, with some modifications, the capacity of urea production has been increased by 20 per cent.

The plant is currently undergoing a major plan of expansion to further increase the urea production capacity by 50 per cent. The conversion 90,000 metric tonne per year of ammonia into urea will allow Fertil to supply feedstock urea to the new melamine plant and process the gas off and carbonate return from the melamine plant as well.