GCC fertilizer exports have reached historical record levels, as rising market protectionism continues to dominate global markets, new figures by the Gulf Petrochemicals and Chemicals Associations (GPCA), the voice of the chemical industry in the Arabian Gulf, have revealed.
According to figures by GPCA, the GCC fertilizer production capacity is likely to reach 38.9 million tons this year and poised to hit an estimated 47 million tons by 2025 growing at a CAGR (compound annual growth rate) of 7.7 percent between 2007-2017.
At 46 percent, Saudi Arabia accounts for almost half of GCC fertilizer production in 2018, followed by Qatar (25 percent) and Oman (12 percent), which has increased its share from 11 percent in 2017, said a report by the Gulf Petrochemicals and Chemicals Associations (GPCA).
GPCA data revealed the fertilizer exports in the Gulf region have surged to historic levels of 20.4 million tons, up 5.3 percent in 2017 compared to the previous year as rising market protectionism continues to dominate the international markets.
The figures grew 5.3 percent year-on-year registering a CAGR of 6 percent between the 2007-2017 period, stated GPCA, the voice of the chemical industry in the Arabian Gulf region.
Growth in regional fertilizer trade comes in stark contrast to escalating market tensions and changing trade policies between major economic powers such as the United States, European Union and China, it added.
The GCC fertilizer industry remains heavily export-oriented, shipping its products to 80 countries from across the globe, with India, Brazil and the US emerging the top three GCC export destinations.
Asia accounted for 55 percent of total exports in 2017, followed by South America (21 percent), North America (15 percent), and Africa (7 percent).
GPCA said the sales revenues have also been growing at a CAGR of 5.7 percent between 2010 and 2017, standing at $5.9 billion in 2017, albeit down from a peak of $7.2 billion in 2014 due to a drop in global fertilizer prices.
As a key contributor to socio-economic development in the region, the GCC fertilizer industry accounts for 54,900 direct and indirect jobs, growing at a CAGR of 7.2 percent over the past decade, said the GPCA in its report.
In 2017, the industry generated $6.7 billion in indirect economic activity in the region, from support services, to warehousing and distribution, to packaging and others, it added.
The key role of fertilizers in ensuring food security, innovations in regional agriculture and new trade developments from across the globe will be in the spotlight at the ninth GPCA Fertilizer Convention which opens tomorrow (Sept. 18) in Muscat, Oman.
The three-day convention is being held under the patronage of Dr Fuad Bin Jaafar Bin Mohammed Al-Sajwani, Minister of Agriculture and Fisheries, Oman.
To be held under the theme “New frontiers and opportunities, the event will see the presence of Salim Al-Aufi, Undersecretary of Ministry of Oil and Gas, Oman. The opening remarks at the event will be by Dr Abdulrahman Jawahery, President, GPIC and Vice Chairman, GPCA.
On the upcoming event, GPCA Secretary General Dr Abdulwahab Al Sadoun said: "Despite a continuing rise in global market protectionism, the Gulf region has enjoyed record high fertilizer exports in 2017, thus, cementing its position as a globally recognized hub for the production and export of fertilizers."
"To sustain and increase this growth, the industry would need to continue to explore new markets globally, and free trade will play a key role in ensuring its profitability and the sustainable development of the region, to which the industry is an important contributor," he added.