The Gulf petrochemical producers, which are set to ramp up their fertiliser production by more than 60%, has sought World Trade Organisation’s (WTO) intervention in removing the trade barriers that currently exist in some of the key markets such as Asia and Europe.
“Protectionist attitude has been adopted by certain markets such as the Europe and Asia. We think it is counterproductive and will have ramifications in the prices and the supply of fertilisers to farming community,” GPCA secretary general Abdulwahab al-Sadoun told the media on the sidelines of the second GPCA Fertiliser conference, which will conclude today.
Asked whether the GPCA, which now has 175 member companies, would take up the matter with the WTO, he said it was active through the GCC (Gulf Co-operation Council) secretariat, which has a WTO committee. “We are taking to the WTO all the issues as per the rules,” he added.
He said the regional industry has been externally challenged by both the health of global economy, which influences the demand for fertilisers, and the export restrictions and trade barriers introduced in the global markets.
Highlighting that the recent volatility in agricultural and fertiliser prices is partly driven by the export restrictions and barriers to free trade, he said GPCA is closely coordinating with its stakeholders including global trade associations to provide a strong voice of advocacy for the industry as governments around the world seek remedies for these issues.
“We at GPCA will spare no efforts in promoting and protecting our products which are consumed around the world, improving the daily lives of millions of people,” al-Sadoun said.
Finding that high farm prices over recent years led to increased fertilisers production to meet the strong demand as reflected in tight markets and higher fertiliser prices, he said all the producers in the region are producing at their full capacity and there is no spare capacity at all.
“Short-term demand for fertilisers is likely to remain strong driven by increased consumption to support higher level of production for basic and high value food crops,” he said, adding GPCA believes that securing fertilisers supply to global markets can shield the world’s growing population from food shortage and mitigate the risk of food price spikes.
About the emergence of the Arabian Gulf as a major global hub for the production of fertilisers, he said there are currently more than 20 ammonia plants in the region, the majority of which are located in Qatar and Saudi Arabia.
Finding that massive expansion is currently underway throughout the Gulf region with new fertiliser capacity coming on stream, he said “by 2015, the combined fertiliser production in the region will amount go about 45mn tonnes per annum (mta) from the present 27mta.”
This expansion drive, according to him, would entail additional production capacities for ammonia, urea and phosphate.
Qafco’s new plant to open in Dec
Qatar’s fertiliser production will further enhance with the Qatar Fertiliser Company’s fifth plant Qafco-5 set to be inaugurated by December this year and the sixth one expected by next year.
“The Qafco-5 expansion project will raise Qafco’s annual production capacity to 3.8mn metric tonnes of ammonia and 4.3mn metric tonnes of urea making it the world’s largest single-site producer of both ammonia and urea,” Qafco CEO Khalifa al-Sowaidi told the second Gulf Petrochemicals and Chemicals Association Fertiliser convention in Doha.
Thus far, Qafco, an Industries Qatar subsidiary, has become the world’s largest single site urea producer after the inauguration of its fourth plant in April 2004.
The Qafco-6, which is expected to come onstream in 2012, will increase the company’s annual production capacity of urea to 5.6mn metric tonnes consequently strengthening the company’s position as a key player in the global fertiliser market, he said.
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