“The Fertilizer Value Chain – Supply System Management and Servicing Farmers’ Needs” – Co-Sponsored by the Thai Fertilizer Producer & Trade Association (TFPTA)
August 22-26, 2011
These are uncertain times for all involved in the fertilizer value chain – suppliers, importers, distributors, dealers, farmers and public officials have been exposed to great uncertainty and risk in fertilizer supply, demand and prices. During 2007-09 prices of such major fertilizer products as urea, DAP and muriate of potash quadrupled within a nine-month timeframe; and then, in the case of nitrogen and phosphorous fertilizers, declined just as quickly and by almost the same magnitude.
What happened and why? Numerous factors contributed to the volatility – global food security threats, bio-fuel popularity in North America, disruptions in fertilizer production in some markets, export restrictions by some key exporters to ensure their own domestic fertilizer supply requirements and the continued credit market disruptions and instability. Clearly, the external market environment had a direct and compelling impact upon all involved in the fertilizer value chain.
Assurance of fertilizer supply on a timely basis, cost-containment to minimize the high costs of fertilizers in times of rapidly escalating/declining prices, and improving farmer access to fertilizers not only to improve food security but also to allow for acceptable financial returns to farmers using fertilizers have impacted decision-making at all levels. Policymakers, fertilizer suppliers, importers, distributors, dealers and farmers (as well as those providing logistics and financial services) face great risks associated with decision-making in fertilizer supply management. Servicing farmers’ needs is critical to agriculture sector performance. At no time in recent history has there been a greater challenge in improving farmer access to fertilizers.
At the level of fertilizer policy, “smart subsidies” have been popular in some of the most vulnerable markets. One issue is how best to improve smallholder farmers’ access to fertilizers and at the same time preserve market-based fertilizer supply systems. Foreign exchange limitations have necessitated emergency measures to allow for fertilizer importation. During the rapid run-up in prices, fertilizer procurement at the lowest price was a great challenge. And now with prices declining, some major buyers are applying web-based procurement strategies to generate lower quotations. Decisions on pricing, procurement, inventory management and financial management have never been more challenging. And maintaining good relations with supply chain members has never been more important to the long-term viability of private enterprises.
When one considers fertilizer supply, demand and international trade, Asia is arguably the most important region of the world. Asia represents more than 60 percent of the world fertilizer market. China is the world’s largest producer and consumer of nitrogen fertilizers. India is the world’s largest importer of urea fertilizer. International fertilizer market prices are directly and very substantially influenced by past, current and future developments in the Asian fertilizer market. And importantly, the fertilizer marketing systems in many Asian countries reflect a high degree of efficiency in import procurement, logistics management, fertilizer demand forecasting, advisory services to farmers and cost control.
While other areas of the world, such as Africa, have different challenges, the global fertilizer market impacts even the smallest fertilizer markets. Most countries in Africa are dependent upon imports (and thus international market prices) for their fertilizer supplies. Fertilizer promotion includes technology transfer, and that is paramount to increased demand, whether it is in Asia, Africa or Latin America. Inventory management, dealer network expansion and management, credit system management, policy influences and implications, pricing, the cost of doing business, sales forecasting, quality control and provision of quality service to farmers have never been more critical to long-term success in fertilizer supply and marketing.
To improve the knowledge, understanding and skills of those involved in the fertilizer value chain, in fertilizer supply management and in servicing the needs of small farmers, IFDC conducted an international training program entitled "The Fertilizer Value Chain – Supply System Management and Servicing Farmers’ Needs." The program was held in Bangkok, Thailand, August 22-26, 2011. The training program, which drew on lessons learned and best practices from IFDC and partner organizations in Asia, targeted mid- to senior-level officials in the public and private sector who are involved in the fertilizer supply system and servicing the needs of smallholder farmers.
The five-day training program was designed to:
- Improve knowledge of the components of fertilizer markets and marketing in open and competitive markets.
- Help improve analytical, planning and decision-making abilities in relation to the management of fertilizer supply systems and fertilizer marketing.
- Allow participants to assess the status of fertilizer supply systems in Asian economies.
- Identify the policies, regulations and institutions needed to develop highly functioning fertilizer markets.
- Share lessons and best practices among country participants.
This program targeted mid-level to senior-level public and private sector officials in the fertilizer and agribusiness industries, international procurement agents, import/export managers, strategic planners and marketing department managers who are concerned with the fertilizer supply chain.
Government officials who have a supervisory and/or regulatory role in fertilizer marketing, including procurement and distribution, or the development of agro-input policies also found the training program useful. The training program was also aimed at representatives of donor organizations involved in funding agricultural input development and private sector projects in developing countries.
The program covered a full spectrum of timely and high-demand topics:
- Fertilizer supply systems management strategies in times of supply uncertainty.
- Fertilizer marketing in a competitive market environment.
- Agronomics of fertilizer use.
- Economics of fertilizer use.
- International fertilizer market supply and demand situation and outlook.
- Important factors involved in efficient fertilizer procurement (market intelligence, international procurement techniques, import financing, pitfalls, etc.).
- Logistical issues involved in fertilizer distribution (fertilizer handling in bulk and bags, in ports and plants, transportation, warehousing, packaging, etc.).
- Fertilizer marketing in some Asian countries and lessons learned in terms of policy reforms, technology transfer, access to finance and market transparency, private sector involvement, fertilizer market information, etc.
- Managing the fertilizer distribution functions.
- Fertilizer marketing costs and cost containment.
- Smart subsidies – the IFDC experience in Asia and Africa.
- Financial management issues related to the fertilizer supply chain.
- How to better service the needs of farmers.
The program included formal sessions and breakout groups. Field trips and interactive discussion involving the participants and lecturers were integral parts of the program, ensuring that specific interests of the participants were covered.
The program faculty included subject matter experts from IFDC and partner organizations.
IFDC is a nonprofit, public international organization (PIO) dedicated to increasing agricultural productivity and food production through the development and use of plant nutrients in sustainable crop production systems. Headquartered in Muscle Shoals, Alabama, U.S.A., IFDC is involved in human resource development, research and technical assistance in collaboration with public, private, national and international organizations throughout the world. IFDC has conducted more than 700 formal workshops, study tours and training programs for about 10,000 participants from 150 countries since 1974. The programs have covered a wide range of subjects including integrated soil fertility management and fertilizer use efficiency, fertilizer production technology, agro-input dealership, competitive marketing, supply chain management, investment analysis, policy reforms and numerous specialized topics.
About Thai Fertilizer Producer Trade Association (TFPTA)
The Thai Fertilizer Producer Trade Association was set up in 1975 by a group of factory owners producing mixed fertilizers comprising of 10 factories. The first founder of the association is Mr. Chet Tansakun. Presently, the Thai Fertilizer Producer Trade Association has 40 members and its total capacity has been increased to 2-2.5 million tons per year providing both bulk-blended chemical fertilizer and organic fertilizer.
The association has the following objectives, to promote, to support and to develop members’ activities in upgrading production standards, fertilizers, and distributing channels, thus enabling Thai farmers to use good fertilizers with the same quality as that of imported fertilizers. The farmers will then be able to export agricultural products competitively with other countries. To help the members solve different problems and give advice related to their business operations, as well as coordinate with government sectors, supporting academics research on factors influencing agricultural production is also one of our important objectives.
The Thai Fertilizer Producer Trade Association encourages: revision of laws on fertilizers, for the benefit of society, of country as a whole and among members of fertilizer producer; the development of relationships and cooperation with government sectors such as, the Ministry of Agriculture and Industry, Ministry of Commerce, other associations, organizations, and foundations, by sponsoring and helping in social works; and the continuous development of academic knowledge among members.
For more information:
Director, Training and Workshop Coordination Unit
P.O. Box 2040
Muscle Shoals, Alabama 35662, U.S.A.
Telephone: +1 (256) 381-6600
Telefax: +1 (256) 381-7408
As a nonprofit organization, IFDC does not finance or sponsor any participant.