Emerging opportunities in the fertiliser market

The ongoing supply chain issues caused by the COVID-19 pandemic and climate change-related events and the emerging widespread sanctions levied against Russia due to the conflict with Ukraine have resulted in significant worldwide shortages of a range of critical fertilisers. Therefore, the coming 10 — 20 years will be most vital for transitioning to a global food system to manage agricultural mineral nutrients holistically. Therefore, fertilisers are needed more than ever to boost crop production to keep people fed and healthy. Nitrogen, phosphorus, and potassium, or NPK, are the "Big 3" primary nutrients in commercial fertilisers. Each of these fundamental nutrients plays a crucial role in plant nutrition.

The total global production of fertiliser is around $185 billion. Strong demand and higher input costs had already driven up fertiliser prices in 2021. Moreover, the Ukraine conflict has driven disruption in supplies and escalation in prices of fertilisers. Russia's leading exporter has a 12.6 per cent share and 15 per cent, including raw materials. Russia is also the leading exporter of fertiliser raw materials such as 23 per cent of ammonia exports, 14 per cent of urea exports, 10 per cent of processed phosphate exports and 21 per cent of potash exports, and Belarus is the second-largest exporter of potash, with a 20 per cent share, according to data from The Fertiliser Institute.

The global fertiliser market is expected to grow exponentially over the next five to seven years and generate revenue above $323 Billion by 2028. This data provides deep insight into the industrial market's current and future opportunities across various fertilisers products (nitrogen, phosphorus, and potassium), applications (fertiliser, animal feed, fungicides, cosmetics, food preservatives, others) and geography market (Asia-Pacific, North America, Europe, South America, Middle East, and Africa). Looking toward the future, the Big 3 fertiliser components are available in Jordan and operate within an oligopolistic market. A few large companies dominate the market due to barriers to entry, granting a great deal of pricing power and a sustainable competitive advantage.

Jordan Phosphate (JPMC) and Arab Potash (APC), with a strong foundation rooted in and a positive outlook toward creating additional value, are perfectly positioned to ride this tailwind of increased demand into future success and capitalise on the growing demand for fertiliser products. Their efficacy in fulfilling such needs is evident in its stock and financial performance. Furthermore, the companies have not only carefully managed capital expenditures to ensure the necessary infrastructure to maintain pace with increasing demand, but they have also established economies of scale, primarily through their network of flexible, low-cost mines.

Jordan needs to complete the third pillar through nitrogen-based fertilisers, which are produced by mixing nitrogen from the air with hydrogen from natural gas, which is commercially available at the National Petroleum Company (NPC) at Risha field (located northeast of Jordan). Nitrogen/ammonia production will be associated with the efforts being made in potash and phosphate and the willingness to develop a deep association for improved technologies, logistics, and application in downstream fertilisers to produce NPK products. Furthermore, these plants will be powered with very cheap natural gas to be more competitive in the other products MAP, DAP, and Potassium Chloride (KCl). In addition, the high prices of NPK will enable Jordan to produce ammonia through the green hydrogen project, which is under development by Fortescue Future Industries (located in Aqaba),

The fertiliser sector is vital to the Kingdom, with the high potential to become Jordan's most significant source of income and reduce the dependence on the importation of fertiliser. This sector will enable the private sector to create more jobs on a massive scale, increase foreign exchange inflow and accelerate economic growth. The fertiliser is an invaluable input for the agriculture sector, which would guarantee farm productivity and invariably attract more entrepreneurs into agribusiness, which will add value to farming, and make the nation self-sufficient in food production.