SOUTH AFRICAN FERTILIZERS MARKET ANALYSIS REPORT

SOUTH AFRICAN FERTILIZERS MARKET ANALYSIS REPORT 215 Directorate Marketing Tel: 12 319 8455 Private Bag X 15 Fax: 12 319 8131 Arcadia E-mail:MogalaM@daff.gov.za 7 www.daff.gov.za 1

TABLE OF CONTENTS 1. DESCRIPTION OF THE INDUSTRY... 3 2. GLOBAL FERTILISER PRODUCTION AND CONSUMPTION... 3 3. MANUFACTURING OF FERTILIZER... 6 5. LOCAL FERTILIZER PRICES VS INTERNATIONAL FERTILIZER PRICES... 9 6. EXPORT VOLUMES OF FERTILIZERS... 1 6.1 LIMESTONE AMMONIUM NITRATE (LAN)... 1 6.2 MONO-AMMONIUM PHOSPHATE (MAP)... 12 6.3 NITROGEN, PHOSPHORUS AND POTASSIUM (NPK)... 13 6.4 POTASSIUM CHLORIDE... 15 6.5 POTASSIUM SULPHATE... 16 6.6 SUPERPHOSPHATE... 17 7. IMPORT VOLUMES OF FERTILIZERS... 19 7.1 UREA... 19 7.2 LIMESTONE AMMONIUM NITRATE (LAN)... 21 7.3 MONO-AMMONIUM PHOSPHATE (MAP)... 22 7.4 POTASSIUM SULPHATE... 24 7.5 POTASSIUM CHLORIDE... 25 7.6 SUPERPHOSPHATE... 26 8. SWOT ANALYSIS (STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS)... 28 9. ROLE PLAYERS IN THE FERTILZER INDUSTRY... 29 1. ACKNOWLEDGEMENTS... 3 2

1. DESCRIPTION OF THE INDUSTRY Fertilizer consumption in South Africa represents about.5% of the total global consumption and as such the local fertilizer industry is a price taker. For this reason it is important to study the international fertilizer supply and demand balances and other factors which influence this market as they have a direct impact on the domestic market. The South African fertilizer industry is fully exposed to world market forces and operates in a totally deregulated environment with no import tariffs or government sponsored support measures. In this deregulated market environment, fertilizer prices are strongly influenced by international prices, currency exchange rates (R/US$) and shipping costs. Farm gate prices of fertilizer evidently include the cost of distribution, intermediate storage and packaging. Maize accounts for 41% of total fertilizer application while the second largest fertilizer consumer is sugar cane at 18%. The horticultural and fruit crop sectors account for 2 percent of fertilizer consumption but their contribution to the total value of crop production is much greater. The South African fertilizer market is very competitive, with a handful of national and regional operators. Competition is driven through price incentives, product differentiation and specialized services such as individual agronomic advice, custom blending and application. South Africa is a net importer of fertilizers. All of our potassium, as well as 6% to 7% of our nitrogen requirements are imported. This means that the local prices would be subjected to the same supply and demand drivers as in the international industry. Local prices are therefore also influenced by the shipping costs and the rand/dollar exchange rate. Most of the international fertilizer prices (dollar per ton) increased on an annual basis and due to the significant depreciation of the exchange rate international fertilizer prices increase even more. 2. GLOBAL FERTILISER PRODUCTION AND CONSUMPTION Table 1 below presents the top-ten fertilizer producers in the world during 214, with China occupying the top spot with approximately 84 million tons while Trinidad and Tobago occupied the tenth spot with five million tons. Table 1: Global fertilizer production rankings - 214 RANK COUNTRY TONS( ) 1 China 84 292 2 Russia 24 44 3 Canada 21 71 3

World Quantity (1 tons) RANK COUNTRY TONS( ) 4 United State 2 952 5 India 14 516 6 Belarus 7 653 7 Germany 7 87 8 Indonesia 5 421 9 Ukraine 5 24 1 Trinidad & Tobago 4 925 Source: Grain SA, 215 Figure 1 below shows the global consumption of fertilizers based on the three major nutrients namely, Nitrogen (N), Phosphorus (P) and Potassium (K) between 24 and 213 marketing seasons. 12 1 8 6 4 2 Figure 1: Global fertiliser consumption 24 25 26 27 28 29 21 211 212 213 N P K Source: Grain SA It is quite clear from the Figure 1 above that the demand for nitrogen fertilizers was high over the past ten years under review, followed by phosphorus and potassium. The figure also shows that global consumption of nitrogen fertilizer consistently increased from 24 except for a slight decline in 28 to approximately 95 million tons. In 213, the demand for nitrogen fertilizer increased dramatically and peaked at approximately 11 million tons. Globally, the demand for phosphorus and potassium fertilizers was very low compared to Nitrogen during the ten year period under review and not more than 41 million tons per annum. Nitrogen-based fertilizers are the most used for crop production. The international price of nitrogen fertilizer automatically went up because of high demand for the product. 4

Fertiliser Quantity (tons) During the same period, the price of phosphorus and potassium fertilizers declined substantially due to very low demand globally. 3. SOUTH AFRICAN FERTILISER CONSUMPTION The utilisation of fertilisers in South Africa between 24 and 215 is depicted in Figure 2 below. 5 45 4 35 3 25 2 15 1 5 Figure 2: Fertiliser consumption in South Africa 24 25 26 27 28 29 21 211 212 213 214 N P K Source: Fertasa It is quite clear from Figure 2 above that nitrogen fertilizers were the mostly used fertilizers throughout the period under review, followed by potassium and phosphorus. The figure also shows that South Africa s consumption of fertilizer experienced an increase from 24 and a decline in 25 and 21 to approximately 35 and 4 tons respectively. In 29, the demand for fertilizer increased dramatically until a peak was attained at approximately 45 tons. Domestically, the demand for phosphorus and potassium fertilizers was very low during the ten year period under review and not more than 13 tons per annum. 5

3. MANUFACTURING OF FERTILIZER 3.1 Figure 3: Phosphate fertilizers manufacturing process Phosphate Rock Mine Phosphate Rock Production of Phosphoric Acid Sulphuric Acid Phosphoric acid Production of Final products Ammonia DAP, MAP, SSP, TSP, FEED AND OTHER PHOSPHATES The manufacturing process of phosphate fertilizers which involves different ingredients used is shown in Figure 3 above. In this process, first stage shows that phosphate fertilizer is from phosphate rock mine that transforms it into phosphate rock which is then mixed with phosphoric acid and ammonia salts and gas and as a result, a complete product becomes phosphate fertilizer that is used in the production food crops such as maize. 6

3.2 Figure 4: Nitrogen Fertilizer manufacturing process Ammonia Natural Anhydrous Ammonia O2 Nitric Acid Liquid Am Nitrate Am Nitrate Air Urea UAN Blending UAN Solution Granulation Urea CO2 In this process, natural gas and steam are pumped into a large vessel. Next, air is pumped into the system, and oxygen is removed by the burning of natural gas and steam. This leaves primarily nitrogen, hydrogen, and carbon dioxide. The carbon dioxide is removed and ammonia is produced by introducing an electric current into the system. Any impurities are removed from the ammonia, and it is stored in tanks until it is further processed. While ammonia itself is sometimes used as a fertilizer, it is often converted to other substances for ease of handling. Nitric acid is produced by first mixing ammonia and air in a tank. In the presence of a catalyst, a reaction occurs which converts the ammonia to nitric oxide. The nitric oxide is further reacted in the presence of water to produce nitric acid. Nitric acid and ammonia is used to make ammonium nitrate. This material is a good fertilizer component because it has a high concentration of nitrogen. The two materials are mixed together in a tank and a neutralization reaction occurs, producing ammonium nitrate. This material can then be stored until it is ready to be granulated and blended with the other fertilizer components. 7

3.3 Figure 5: Potash fertilizer manufacturing process Ore from mine Size Reduction Remove Clay Flotation to Separate Potash from Salt Wet potash concentrate Crystallizati on Fines Compaction Sizing Dry concentrate Dewatering & Drying Soluble or Industrial Granular Standard Solid or Liquid Fertilizer Solid fertilizer Solid fertilizer industrial Figure 5 above indicates the manufacturing process of different types of potash fertilizers and stages / phases of manufacturing during 214/15 production season. The figure further indicates that potash fertilizer is manufactured from Ore from the mines and it is then reduced in size before removing the clay content. The next stage is to separate potash from salts and wet potash concentrate becomes clear, the watering and drying phase takes place in preparation for the final stages of different types of potash fertilizer. The next stage of manufacturing is sizing, compaction and crystallization of the primary product which leads to either soluble or industrial (solid/ liquid) fertilizer, granular (solid) fertilizer and standard (solid fertilizer industrial). 4. FERTILIZER MARKET AND PRICING Figure 6 shows average fertilizer prices in South Africa for the period under scrutiny (26 and 214). Average fertilizer prices of Mono-Ammonium Phosphate (MAP) dominated over the past nine years attaining a peak in 28 at approximately R13 188. per ton. Although there was a sharp decline in average fertilizer prices of MAP in 29, positive trends were observed again between 21 and 214 to price levels of approximately R8 4. per ton. Potassium Chloride average prices attained a peak in 28 and again in 29 at approximately R9 544. and R9 615. per ton respectively. The 8

Price(Rand/ton) average prices of Urea (46) and Limestone Ammonium Nitrate (LAN) attained their peaks also in 28 at approximately R7 48. and R5 329. respectively. Generally, it is evident from the figure below that between 21 and 214, average prices of fertilizers in South Africa increased although at slow increasing trends. Between 26 and 27 and between 29 and 21, average fertilizer prices in South Africa were low and that benefitted farmers in terms of prices and affordability but in 28, farmers had to deal with high average prices which had an impact on production and farm income. 14 12 1 8 6 4 2 26 27 28 29 21 211 212 213 214 MAP 363 555 13188 5595 6337 7252 7646 7739 84 KAN / LAN (28) 2269 2818 5329 366 3494 4462 487 5254 5399 Ureum / Urea (46) 3258 3972 748 4913 4382 564 6173 6181 6258 Kaliumchloried / Potassium Chloride (grof/granular) Figure 6: Average fertiliser prices in South Africa 2832 3255 9544 9615 5924 5988 6827 749 6784 Source: GrainSA 5. LOCAL FERTILIZER PRICES VS INTERNATIONAL FERTILIZER PRICES Tables 2 and 3 below show the relationships between local and international fertilizer prices. It can be observed from the tables that local prices responded positively to changes in the international fertilizer prices over the past two years. The tables also show that there is a price gap between local and international fertilizer prices and this could be because of fluctuations in the exchange rate between the rand and other currencies globally. Table 2: Local fertilizer prices Fertilizers April 213 April 214 % CHANGE R/ton R/ton KAN 5 518 5 59 1.3 Urea(46) 6 456 6 834 5.9 MAP 7 456 8 274 11. 9

Fertilizers April 213 April 214 % CHANGE R/ton R/ton Potassium chloride 7 41 6 989 -.7 Source: GrainSA Table 3: International fertilizer prices Fertilizers April 213 April 214 % CHANGE R/ton R/ton KAN 5 69 5 31 -.7 Urea(46) 3 89 3 736 1.9 MAP 4 37 5 247 21.8 Potassium chloride 3 789 3 21 15.5 Source: Grain SA 6. EXPORT VOLUMES OF FERTILIZERS 6.1 Limestone Ammonium Nitrate (LAN) Export volumes of limestone ammonium nitrate (LAN) fertilizers from South Africa to the world during the past ten years are shown in Figure 7. Most of the export volumes of LAN from South Africa to the world went to Africa followed by minimal exports to the Americas, Europe, Oceania and Asia. Eports volumes of LAN to Africa attained a peak in 27 at approximately 6 76 tons followed by a decrease in 28. In 212, exports of LAN to Africa reached its lowest point at approximately 778 tons. There was a 544% increase in export volumes of LAN from South Africa to Africa in 214 as compared to 213 marketing season. 1

Export Quantity (tons) Export Quantity (tons) Figure 7: Export volumes of Limestone Ammonium Nitrate (LAN) fertilizer to the world 7 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Africa 3217 5443 676 3825 3722 117 2692 778 1245 818 Americas 598 54 Asia 2 3 Europe 31 68 Oceania 34 48 Figure 8 indicates export volumes of limestone ammonium nitrate (LAN) fertilizer to Africa particularly the SADC region over the past decade. The major export market for LAN fertilizer to SADC was Zimbabwe, followed by Malawi during the past decade. Export volumes of LAN fertilizer from South Africa to Zimbabwe attained a peak in 27 at approximately 45 43 tons. During the second half of the ten year period, export volumes of LAN fertilizer were from a low base reaching a maximum of 5 128 tons. In 28, there were no export volumes of LAN fertilizer to Zimbabwe. There was a 1 3% increase in export volumes of LAN fertilizer to Zimbabwe in 214 as compared to 213. Figure 8: Exports of Limestone Ammonium Nitrate (LAN) fertilizer to SADC 5 45 4 35 3 25 2 15 1 5 Democratic Republic of the Congo 25 26 27 28 29 21 211 212 213 214 66 235 34 19 34 9 Malawi 17945 34 1125 18 1233 584 278 92 6185 Mozambique 22 8 2 433 9 54 62 Zambia 3789 2928 3718 2673 281 698 488 29 128 1264 Zimbabwe 1351 2471 4543 17896 5128 31 451 32 448 11

Export Quantity (tons) 6.2 Mono-Ammonium Phosphate (MAP) Figure 9 represents export volumes of Mono-Ammonium Phosphate (MAP) fertilizer to the world between 25 and 214 marketing seasons. The major export market for MAP fertilizer was mainly Africa, followed by Americas and Oceania over the past decade. Export volumes of MAP fertilizer from South Africa to Africa attained a peak in 28 at approximately 57 537 tons, while export volumes of MAP fertilizers to Americas attained a peak in 211 at approximately 81 982 tons. Export volumes of MAP fertilizer from South Africa to Oceania attained a peak in 25 at approximately 57 54 tons, while export volumes of MAP fertilizers to Asia attained a peak in 28 at approximately 2 tons. There was a slight decline of 1, 6% in export volumes of MAP fertilizer to Africa in 214 as compared to the 213 marketing season. 9 8 7 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Africa 12817 11328 159 57537 12671 21629 19619 1235 48714 47929 Americas 1536 15 234 81982 2169 25 Asia 2 Oceania 5754 85 3 24 1112 34826 185 Figure 9: Export volumes of Mono-Ammonium Phosphate (MAP) to the world Export volumes of Mono-Ammonium Phosphate (MAP) fertilizer to Africa particularly the SADC region are depicted in Figure 1. Volumes of MAP fertilizer exports from South Africa to SADC went mainly to Zambia followed by Zimbabwe and Mozambique during the period under observation. Volumes to Zambia were from a high based during the second half (21-214) of the ten year period attaining a peak in 213 at approximately 32 298 tons. Malawi and the United Republic of Tanzania had very low or minimal volumes of MAP fertilizer of not more than 1 tons per annum over the past ten years. It is also clear from the figure that there was an 11.1% decline in export volumes of MAP fertilizer from South Africa to Zambia in 214 as compared to the 213 marketing season. 12

Export Quantity (tons) Figure 1: Export volumes of Mono-Ammonium Phosphate (MAP) fertilzer to SADC 5 45 4 35 3 25 2 15 1 5 25 26 27 28 29 21 211 212 213 214 Malawi 1942 1 4 262 6 7 666 1842 475 Mozambique 4546 4 6 84 57 55 United Republic of Tanzania 1 253 Zambia 1199 2399 4 44 5495 5862 4325 137 32298 28714 Zimbabwe 1678 5918 6335 11674 5574 154 5164 1252 1438 1847 6.3 Nitrogen, Phosphorus and Potassium (NPK) Figure 11 presents export volumes of Nitrogen, Phosphorus and Potassium (NPK) fertilizers to the world between 25 and 214 marketing seasons. Most of the exports of NPK fertilizers to the world went to Africa, followed by minimal export volumes of NPK fertilizers to the Americas, Asia, Europe and Oceania over the past ten years. Export volumes of NPK to Africa were from a high base during the first half of the ten year period (25-29) attaining a peak in 28 at approximately 21 7 tons. During the second half of the same period (21-214) under observation, export volumes of NPK fertilizers to Africa were declining consistently until the lowest levels of exports were attained in 214 at approximately 46 54 tons. There was 37.1% decrease in export volumes of NPK fertilizers to Africa in 214 as compared to 213. 13

Export Quantity (tons) Export Quantity (tons) 25 Figure 11: Export volumes of Nitrogen, Phosphorus, Patassium (NPK) fertilzers to the world 2 15 1 5 25 26 27 28 29 21 211 212 213 214 Africa 182591 168764 198244 217 178697 148246 113356 111226 7447 4654 Americas 453 274 784 475 315 1392 622 83 1442 688 Asia 133 81 21 184 89 257 186 11 54 259 Europe 96 5 22 56 14 25 37 99 33 Oceania 1245 87 62 59 111 99 141 11 Period Years) Figure 12 presents export volumes of Nitrogen, Phosphorus and Potassium (NPK) fertilizers from South Africa to Africa particularly the SADC region over the past decade. Figure 12: Export volumes of Nitrogen, Phosphorus, Potassium (NPK) to SADC 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Angola 192 641 695 498 2 946 5138 44 234 Democratic Republic of the Congo 145 1216 16 261 2837 157 1381 1489 2524 2146 Malawi 65233 17844 56163 3142 446 12976 111 2 672 212 Mozambique 2467 2461 4756 2549 2878 45 1212 391 644 3114 Zambia 5249 76664 6414 9782 61773 73284 65848 55449 2277 8594 Zimbabwe 6444 68777 71952 62893 6765 5379 43795 48142 37816 31283 Export volumes of NPK fertilizers from South Africa to the SADC went mainly to Zambia, followed by Zimbabwe and Malawi. Volumes of NPK fertilizers to Zambia were from a high base during the first half of the ten year period (25-29) under observation attaining a peak in 28 at approximately 97 82 tons. Volumes of NPK fertilizers to Zimbabwe were also from a high base during the first half of the ten year period (25-29) under observation attaining a peak in 27 at approximately 71 952 tons. 14

Export Quantity(tons) Exports to Malawi were also from a high base during the first half of the ten year period (25-29) under observation attaining a peak in 25 at approximately 65 233 tons. There was a 62.3% decrease in export volumes of NPK fertilizers from South Africa to Zambia in 214 as compared to the 213 marketing season. 6.4 Potassium Chloride Figure 13 presents export volumes of potassium chloride from South Africa to the world during the past decade. Most of the exports of potassium chloride from South Africa went to Africa, followed by very minimal exports of potassium chloride to Europe between 25 and 214 Exports to Africa were from a high base during the first half of the ten year period (25-29) under review attaining a peak in 26 at approximately 24 88 tons while exports to Europe were only active between 29 and 21 of the period under observation. There was a 7.5% decline in export volumes of potassium chloride from South Africa to Africa in 214 as compared to the 213 marketing season. 3 25 2 15 1 5 Figure 13: Export volumes of Potassium Chloride to the world 25 26 27 28 29 21 211 212 213 214 Africa 23177 2488 19766 9551 21831 8221 1128 1542 9377 8673 Europe 15 1 Figure 14 presents export volumes of potassium chloride from South Africa to Africa particularly the SADC region over the past decade. Export volumes of potassium chloride from South Africa to SADC went mainly to Zimbabwe, followed by Zambia and Angola. Exports to Zimbabwe were from a high base during the first half of the ten year period (25-29) attaining a peak in 26 at approximately 22 595 tons. Export volumes of potassium chloride to Zimbabwe experienced a dramatic decline between 27 and 214 to low volumes of about 619 tons. Exports to Zambia attained a peak in 27 15

Export Quantity (tons) Export Quantity(tons) at approximately 7933 tons. There was a 22% increase in export volumes of potassium chloride from South Africa to Zimbabwe in 214 as compared to the 213 marketing season. Figure 14: Export volumes of Potassium Chloride to SADC 25 2 15 1 5 25 26 27 28 29 21 211 212 213 214 Angola 178 3 336 8268 4118 Mozambique 81 61 157 116 43 473 261 9 256 United Republic of Tanzania 5 1512 18 Zambia 416 255 7933 35 744 388 7699 2 383 875 Zimbabwe 17883 22595 11759 7583 1575 2186 2688 782 619 1981 6.5 Potassium Sulphate Figure 15 shows export volumes of potassium sulphate from South Africa to the world between 25 and 214. Figure 15: Export volumes of Potassium Sulphate to the world 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Africa 4529 1559 8291 3774 3316 2378 4585 2147 3339 2366 Europe 762 68 16

Export Quantity (tons) It is clear from Figure 15 that export volumes of potassium sulphate to the world went mainly to Africa, followed by minimal export volumes to Europe. Export volumes of potassium sulphate to Africa were from a high base during the first half (25-29) of the ten year period under review attaining a peak in 26 at approximately 1 559 tons. During the second half of the same period (21-214) under review, export volumes of potassium sulphate to Africa reached a maximum of approximately 4 585 tons in 211. Europe only managed to import potassium sulphate from South Africa in 29 and 21 at an export quantity of 68 and 762 tons respectively. There was a 29.1% decline in export volumes of potassium sulphate from South Africa to Africa in 214 as compared to 213 marketing season. Figure 16 illustrates export volumes of potassium sulphate from South Africa to the SADC region over the past ten years. The major export market for potassium sulphate from South Africa to SADC was Zimbabwe, followed by minimal exports to Mozambique and Malawi. On average, South Africa exported 3 657 tons of potassium sulphate to Zimbabwe over the past decade. Exports of potassium sulphate from South Africa to Zimbabwe attained a peak in 26 at approximately 1 2 tons. During the second half of the ten year period (21-214), exports of potassium sulphate to Zimbabwe were from a low base attaining a maximum of about 3 943 tons in 211. There was an increase of 42.8% in export volumes of potassium sulphate from South Africa to Zimbabwe in 214 as compared to 213 marketing season. 12 1 8 6 4 2 Figure 16: Export volumes of Potassium Sulphate fertilizer to SADC 25 26 27 28 29 21 211 212 213 214 Malawi 6 84 79 15 3 7 32 Mozambique 3 1 26 27 98 348 656 25 Zimbabwe 372 12 7889 3664 184 423 3943 1619 1424 233 6.6 Superphosphate 17

Import Quantity (tons) Figure 17 presents export quantities of superphosphate fertilizers from South Africa to the world during the past decade. The major export market for superphosphate fertilizer to the world was mainly Africa, followed by minimal export quantities to Europe and Americas. On average, South Africa exported 6 76 tons of superphosphate fertilizer to Africa over the past decade. Export volumes of superphosphate from South Africa to Africa were from a high base during the first half of the ten year period (25-29) attaining a peak in 25 at export quantity of approximately 19 397. South Africa only managed to export superphosphate fertilizer to the Americas and Europe in 25 at approximately 6 63 and 9 226 tons respectively. There was a 111.3% increase in export quantity of superphosphate fertilizer from South Africa to Africa in 214 as compared to 213. 25 2 15 1 5 Figure 17: Export volumes of Superphosphate fertilizer to the world 25 26 27 28 29 21 211 212 213 214 Africa 19397 18712 35 577 1732 619 4541 1345 1889 3992 Americas 663 Europe 9226 Export volumes of superphosphate fertilizer from South Africa to the SADC region are shown in Figure 18 below. 18

Export Quantity (tons) 7 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Malawi 628 196 114 47 28 223 6 32 Mozambique 13 15 126 3 25 39 17 25 1 139 Zimbabwe 576 49 132 3487 5817 3428 138 1693 3818 Figure 18: Export volumes of Superphosphate fertilizer to SADC Most of superphosphate fertilizer exports from South Africa to SADC went to Zimbabwe, followed by minimal exports to Malawi and Mozambique. On average, South Africa exported 2 4 tons of superphosphate fertilizer to Zimbabwe over the past ten years. Export volumes of superphosphate fertilizers to Zimbabwe were from a high base during the second half of the ten year period (21-214) attaining a peak in 21 at approximately 5 817 tons. Exports to Malawi and Mozambique were very low and not more than 7 tons per annum. There was a 125.5% increase in exports of superphosphate fertilizers from South Africa to Zimbabwe in 214 as compared to 213. 7. IMPORT VOLUMES OF FERTILIZERS 7.1 Urea Import volumes of Urea fertilizers from the world into South Africa over the past ten years are shown in Figure 19. Most of the Urea fertilizers from the world into South Africa over the past decade were mainly from Asia, followed by minimal import volumes from Europe and Africa. On average, South Africa imported 65 499 tons of Urea fertilizer from Asia over the past ten years. Imports of Urea fertilizers from Asia into South Africa were from a low base during the first half of the ten year period (25-29) attaining a maximum of 56 634 tons in 27 while the imports were from a high base during the second half of the ten year period (21-214) attaining a peak in 214 at an import volume of approximately 865 743 tons. Imports from Europe and Africa were very intermittent over the same 19

Import Quantity (tons) ten year period under review. There was a 5.3% increase in import volumes of Urea from Asia into South Africa during 214 as compared to 213. Figure 19: Import volumes of Urea fertilizers from the world 1 9 8 7 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Africa 28 5851 3226 6753 889 23 Asia 43855 492227 56634 53928 59315 661684 684571 726926 576177 865743 Europe 4288 37731 97146 73859 7615 2331 94295 54818 4766 22824 Figure 2 presents import volumes of Urea fertilizers from Western Asia into South Africa during the past decade. Saudi Arabia was the major supplier for Urea fertilizers imported by South Africa, followed by Qatar between 25 and 214 marketing season. On average, South Africa imported 262 437 tons of Urea fertilizers from Saudi Arabia over the past ten years. Imports from Saudi Arabia into South Africa attained a peak in 27 at approximately 336 54 tons. On average, South Africa imported 231 572 tons of Urea fertilizers from Qatar over the past decade. Imports from Qatar into South Africa attained a peak in 212 at approximately 281 851 tons. There was a 21.8% increase in import volumes of urea fertilizers from Saudi Arabia into South Africa during 214 as compared to 213. There was a 1.8% decline in import volumes of urea fertilizers from Qatar into South Africa during 214 as compared to 213 marketing season. 2

Import Quantity (tons) Import Quantity (tons) Figure 2: Import volumes of Urea fertilizer from Western Asia 4 35 3 25 2 15 1 5 25 26 27 28 29 21 211 212 213 214 Qatar 235393 237973 2469 234262 175277 26145 243468 281851 262787 234492 Saudi Arabia 2285 253189 33654 261459 277477 327629 279318 3143 169678 26714 7.2 Limestone Ammonium Nitrate (LAN) Figure 21 presents import volumes of Limestone Ammonium Nitrate (LAN) fertilizers from the world into South Africa between 25 and 214 marketing seasons. The major supplier of LAN fertilizers from the world into South Africa was Europe, followed by minimal import volumes from Asia, Americas and Africa over the past decade. On average, South Africa imported 79 12 tons of LAN fertilizers from Europe over the past ten years. Imports from Europe into South Africa attained a peak in 28 and again in 213 at approximately 151 46 and 146 828 tons respectively. There was a 41.6% decline in import volumes of LAN fertilizers from Europe into South Africa during 214 as compared to 213. 16 14 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Africa 1811 Americas 132 22 Asia 1 216 2 325 7424 333 224 Europe 9189 55532 6683 15146 25452 93896 122368 352 146828 8579 Figure 21: Import volumes of Limestone Ammonium Nitrate (LAN) fertilizers from the world 21

Import Quantity (tons) Figure 22 shows import volumes of Limestone Ammonium Nitrate (LAN) fertilizers from the European Union into South Africa over the past ten years. The major supplier of LAN fertilizers from European Union into South Africa was from the Netherlands, followed by Belgium and Germany over the past ten years. On average, South Africa imported 25 9 tons of LAN fertilizers from the Netherlands over the past ten years. Import volumes of LAN fertilizers from the Netherlands into South Africa attained a peak in 211 at approximately 77 61 tons, while import volumes of LAN fertilizers from Germany attained a peak in 213 at approximately 6 25 tons. There was a 9.1% decline in import volumes of LAN fertilizers from Netherlands into South Africa during 214 as compared to 213. 9 8 7 6 5 4 3 2 1 Figure 22: Import volumes of Limestone Ammonium Nitrate (LAN) fertilizers from European Union 25 26 27 28 29 21 211 212 213 214 Belgium 285 42142 35364 223 17828 1255 14777 797 119 636 Germany 615 285 97 315 137 2122 176 625 23844 Netherlands 14 1141 4474 56429 7761 26937 37572 34181 7.3 Mono-Ammonium Phosphate (MAP) Import volumes of Mono-Ammonium Phosphate (MAP) fertilizers from the world into South Africa are depicted in Figure 23. Most of the import volumes of MAP fertilizers from the world into South Africa during the period under scrutiny were mainly from Europe, followed by Asia and minimal import volumes from Americas and Africa. On average, South Africa imported 36 99 tons of MAP fertilizers from Europe over the past decade. Imports from Europe into South Africa attained a peak in 214 at approximately 73 87 tons, while imports from Asia into South Africa attained a peak also in 214 at approximately 95 357 tons. There was 6.9% increase in export volumes of MAP fertilizers from Europe into South Africa during 214 as compared to 213. 22

Import Quantity (tons) Import Quantity (tons) 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Africa 21 4 42758 126 1528 Americas 1634 61454 944 967 545 18 2913 637 Asia 515 15928 53613 78542 727 3852 7898 14227 552 95357 Europe 19963 39365 567 529 24627 1424 56965 61536 68383 7387 Figure 23: Import volumes of Mono-Ammonium Phosphates (MAP) fertilizers from the world Figure 24 illustrates import volumes of Mono-Ammonium Phosphate (MAP) fertilizers from Western Europe into South Africa over the past ten years. Figure 24: Import volumes of Mono-Ammonium Phosphate (MAP) fertilizers from Western Europe 8 7 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Russian Federation 19599 2615 243 3361 13596 56418 6153 68378 1961 Period(Years) The major supplier of MAP fertilizers from Western Europe into South Africa over the past ten years was the Russian Federation. On average, South Africa imported 27 93 tons of MAP fertilizers from Russian Federation over the past decade. Imports from Russian Federation into South Africa were from a high base during the second half of the ten year period (21-214) under review attaining a peak in 213 at approximately 68 378 tons. Between 25 and 29, import volumes of MAP fertilizers from 23

Import Quantity (tons) the Russian Federation into South Africa were low and not more than 3 tons per annum. There was a 71.3% decline in import volumes of MAP fertilizers from the Russian Federation into South Africa during 214 as compared to 213. 7.4 Potassium Sulphate Import volumes of potassium sulphate from the world into South Africa over the past ten years are shown in Figure 25. The major supplier of potassium sulphate fertilizers from the world into South Africa was Europe, followed by the Americas and Asia over the same period under examination. On average, South Africa imported 21 94 tons of potassium sulphate fertilizers from Europe over the past ten years. Imports from Europe into South Africa attained a peak in 213 at approximately 43 57 tons, while imports from the Americas into South Africa attained a peak in 212 at approximately 32 46 tons. Imports from Asia into South Africa attained a peak in 214 at approximately 34 519 tons. It is also clear from Figure 25 that there was a 37.1% decline in import volumes of potassium sulphate from Europe into South Africa during 214 as compared to 213. 5 45 4 35 3 25 2 15 1 5 Figure 25: Import volumes of potassium sulphate fertilizers from various region 25 26 27 28 29 21 211 212 213 214 Americas 2327 2991 2457 13182 2151 2131 2186 3246 3423 3376 Asia 5 49 165 2887 56 542 3532 34519 Europe 15932 127 14145 3236 3858 23163 25761 2398 4357 27373 Import volumes of potassium sulphate from European Union into South Africa over the past decade are illustrated in Figure 26. Most of potassium sulphate fertilizer imports from the European Union into South Africa were from Germany, followed by Belgium over the past ten year period under review. On average, South Africa imported 15 618 tons of potassium sulphate fertilizers from Germany over the past decade. Imports from Germany into South Africa attained a peak in 28 at approximately 3 339 24

Import Quantity (tons) Import Quantity (tons) tons, while imports from Belgium into South Africa attained a peak in 213 at approximately 13 888 tons. There was a 19.9% decline in import volumes of potassium sulphate fertilizers from Germany into South Africa during 214 as compared to 213. 35 3 25 2 15 1 5 Figure 26: Import volumes of potassium sulphate fertilizers from European Union 25 26 27 28 29 21 211 212 213 214 Belgium 573 2476 1626 154 2838 12371 1855 7243 13888 3336 Germany 9877 7534 11878 3339 116 9942 22853 14779 26639 21323 7.5 Potassium Chloride Import volumes of potassium chloride from the world into South Africa during the past ten years are depicted in Figure 27. Figure 27: Import volumes of potassiun chloride fertilizers from the world 16 14 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Africa 26 8 196 285 557 Americas 18654 2836 1364 6238 843 9719 95421 112253 13441 Asia 9721 13887 112725 175 1891 97564 82728 6744 5927 128413 Europe 17588 16881 114414 15728 642 87231 92672 937 12318 118132 25

Import Quantity (tons) The major supplier for potassium chloride fertilizers from the world into South Africa is Europe, followed by Asia, Americas and minimal import volumes from Africa. On average, South Africa imported 13 339 tons of potassium chloride fertilizers from Europe between 25 and 214 marketing seasons. Import volumes of potassium chloride from Europe into South Africa were from a high base during the first half of the ten year period (25-29) under review attaining a peak in 28 at approximately 15 728 tons. Imports from Asia into South Africa attained a peak in 26 at approximately 13 887 tons. There was a 15.5% increase in import volumes of potassium chloride from Europe into South Africa during 214 as compared to 213. Figure 28 presents import volumes of potassium chloride fertilizers from the European Union into South Africa over the past ten years. Most of the potassium chloride fertilizers from the European Union into South Africa were mainly from Germany, followed by very minimal imports from Lithuania over the same period under scrutiny. On average, South Africa imported 82 326 tons of potassium chloride fertilizers from Europe between 25 and 214 marketing season. Imports from Germany into South Africa were from a high base during the first half of the ten year period (25-29) under review attaining a peak in 27 at approximately 11 613 tons. There was a 15.8% increase in import volumes of potassium chloride fertilizers from Europe into South Africa during 214 as compared to 213. 12 Figure 28: Import volumes of potassium chloride from European Union 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Germany 86295 11629 11613 16987 55885 45254 86321 73785 72535 8396 Lithuania 717 99 98 1684 2222 7.6 Superphosphate 26

Import Quantity (tons) Figure 29 presents import volumes of superphosphate fertilizers from the world into South Africa over the past decade. The major supplying market for superphosphate fertilizers from the world into South Africa was Asia, followed by very minimal imports from Africa and Europe over the same period under review. On average, South Africa imported 23 986 tons of superphosphate fertilizers from Asia between 25 and 214 marketing seasons. Imports from Asia into South Africa attained a peak in 28 at approximately 58 698 tons. There were no imports of superphosphate fertilizers from Africa into South Africa between 25 and 27 and again in 29. There was a 4.7% increase in import volumes of superphosphate fertilizers from Asia into South Africa during 214 as compared to 213. 7 6 5 4 3 2 1 Figure 29: Import volumes of superphosphate fertilizers from the world 25 26 27 28 29 21 211 212 213 214 Africa 14 7176 3935 1161 1 22 Asia 17823 37399 1568 58698 972 1938 19812 17887 2161 22643 Europe 1919 288 5 27 Import volumes of superphosphate fertilizers from Western Asia into South Africa during the past ten years are indicated in Figure 3. The major supplying market for superphosphate fertilizers from Western Asia into South Africa was Israel. On average, South Africa imported 22 1 tons of superphosphate fertilizers from Israel between 25 and 214. Imports from Israel into South Africa attained a peak in 28 at approximately 51 948 tons. During the second half of the ten year period (25-29), imports from Israel into South Africa were low and not more than 21 tons per annum. There was a 21.9% decline in import volumes of superphosphate fertilizers from Israel into South Africa during 214 as compared to 213. 27

Import Quantity (tons) Figure 3: Import volumes of superphosphate from Western Asia 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Israel 17823 37399 1568 51948 6214 17624 19812 17887 298 15684 8. SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) Strengths Financial leverage; Cost advantages; Customer loyalty; Technology; and Brand name. Opportunities Online market; Financial leverage; Innovation; Loosening regulations; New markets; and International expansion. Weaknesses High debt burden; Out-dated technology; Weak supply chain; Weak management; and Customer services. 28

Threats Volatile currency; Government regulations; Intense competition; Volatile revenue; and Political risk. 9. ROLE PLAYERS IN THE FERTILZER INDUSTRY Table 4: Key Stakeholders Fertilizer Type of industries fertilizers 8.1 Kynoch Liquid, Granular and water soluble fertilizers 8.2 Sasol Granular and Liquid fertilizers 8.3 Omnia (Nutriology- Nutrilogie) Liquid, Granular specialty fertilizers and Physical Address Ross street Johannesburg 2125 South Africa 1 Sturdee Avenue Rosebank Johannesburg( SA) 2196 Omonia house Epsom Downs office park 13 Sloane st Bryanston Postal Address P.O Box 5486 Johannesburg( SA) 2 P.O.Box 69888 Bryanston 221 Telephone Email address number 11 317 2 info@kynoch.c o.za 11 441 3111 11 79 8888 Fertilizer@omo nia.co.za 8.4 Profert Granular and Liquid fertilizers 8.5 TRIOMF Granular, Liquid Specialty fertilizers and 8.6 Nutri-flo Granular and Liquid fertilizers 8.7 Greenlands 43 Ross street Potchefstroom North West (SA) 2531 TRIOMF road Potchefstroom 2531 North West (SA) 2 Michelin street, N.W 7 Vanderbijlpark 1911 P.O Box 55 Potchefstroom 252 P.O Box 242 Umhlali 439 P.O Box 6852 Vanderbijlpark 19 18 293 353 info@profert.c o.za 86 187 4663/ 18 285 1291 info@triomfsa. co.za 32 947 211 info@nutriflo.c o.za 16 986 13 info@greenlan dskunsmis.co.za 29

Fertilizer industries 8.9Nitrophosk a (PTY) Ltd Type of fertilizers Liquid, Granular and other fertilizers 8.1 Yara Liquid and Granular fertilizers Physical Address Showgrown, George 6529,SA Western Cape 5167 Russel street George 6529 SA Western Cape Postal Address P.O Box 1138 George 653 Telephone number 44 873 6221/ 44 873 6261 44 514 3185 Email address 1. ACKNOWLEDGEMENTS The following organizations are acknowledged: 9.1 Quantec Easy Data www.easydata.co.za 9.2 Grain SA www.grainsa.co.za 9.3 Fertilizer Association of Southern Africa (FERTASA) www.fertasa.co.za 9.4 Statistical and Economic Analysis, DAFF www.daff.gov.za 3