All posts by mickeybarb@charter.net

Crops/Weather

Crops/Weather, Eastern Cornbelt, Market Watch, South Central, Southeast, Southern Plains, Western Cornbelt

Eastern Cornbelt:

Rain and cooler temperatures spread across southern Illinois late in the week, while warm weather and gusty winds were reported in northern areas of the state.

Highs in the 70s were reported in central Indiana at midweek, but rain and strong winds moved in as the week progressed. Highs in the low-70s were also reported across northern Ohio during the week, with wind and rain expected on March 11-12.

Western Cornbelt:

Just three weeks after historic low temperatures blanketed much of Iowa, the state posted several daily record highs on March 10, including 75 degrees in Des Moines, 72 degrees in Ottumwa, and 69 degrees in Waterloo.

Parts of Nebraska also enjoyed the warmest first ten days of March on record. A powerful cold front was moving in as the week progressed, however, with weekend forecasts warning of 1-3 inches of rain in the Lincoln area and as much as 20-40 inches of snow in parts of western Nebraska, eastern Wyoming, South Dakota, and Colorado.

Heavy rainfall was also expected across central and southern Missouri over the coming weekend, with totals ranging from 1-4 inches and temperatures dropping to the 40s and low-50s.

Southern Plains:

Sources reported favorable weather for fieldwork across much of the Southern Plains during the week, with reports of brisk topdress activity on wheat, pastures, rye grass, and oats. Sources also described a heavy corn planting pace in central Texas.

A strong weather system was taking aim at the region later in the week, however, with forecasts warning of severe thunderstorms for portions of western and central Texas, western Oklahoma, and southern Kansas on March 12-13. Large hail and damaging wind gusts were the primary threats, with the eastern halves of Texas, Oklahoma, and Kansas moving in the crosshairs on March 14.

“We’re supposed to get rain over the weekend, with forecasts showing 1-4 inches expected across Kansas, with the heaviest in the east,” said one Kansas contact. “It would be good to get a couple inches across the entire state, as the driest areas are in the west and north-central. The wheat could use a good drink.”

South Central:

Warm, breezy weather was reported across much of the South Central region during the week, with highs reaching the low- to mid-70s in Tennessee, Kentucky, and Arkansas.

Showers were expected over the weekend along the Tennessee/Kentucky state line and across Arkansas, with forecasts warning of potentially damaging winds and hail. Weekend storms were also possible in northern Louisiana and northwestern Mississippi.

President Biden on March 9 issued a major disaster declaration for Louisiana following last month’s bitterly cold weather, when winter storms knocked out power and water in parts of the state for up to a week. Federal aid will be available across 23 parishes, including grants for temporary housing and home repairs, low-interest loans for property losses, and other assistance for individuals and businesses.

Southeast:

Spring-like weather conditions were reported across most of the Southeast during the week, with temperatures climbing to the mid- to upper-70s in the Carolinas, Virginia, Alabama, and Georgia. The dry weather, coupled with gusty winds, prompted Virginia authorities to issue an elevated wildfire risk advisory at midweek for several counties.

Temperatures in the low-80s were reported in central and southern Florida during the week, with sources describing fieldwork and spring fertilizer application as “very busy” at midweek. The warm, sunny weather followed a period of heavy rain and gusty winds across much of southern Florida on March 6.

“We are finally getting some sunny, dry weather this week,” said one Georgia contact. “Nitrate application is going on small grains and base fertilizer is going out on corn.” Others also reported the application season “breaking hard” after the recent stretch of dry weather.

Transportation

Arkansas River, Illinois River, Market Watch, Mississippi RIver, Ohio River, Transportation, U.S. Gulf

U.S. Gulf:

Harvey Lock was scheduled to shut on March 12-13 for repairs, sources said, blocking movements between 7:00 a.m. and 6:30 p.m. on both days. Additional shutdowns were projected on April 5-21 for repairs to the 4th Street Bridge, located adjacent to Harvey Lock. Traffic is expected to detour through Algiers Lock while Harvey is closed.

Normal operation resumed at Colorado Lock on March 6, ending a run of daytime shutdowns that kicked off on Feb. 25. Additional closures are scheduled for March 22 through April 2, shutting the lock to navigation from 7:30 a.m. to 4:30 p.m. daily.

Port Allen Lock guidewall damage suffered in a January barge collision triggered continued towing restrictions. Westbound tows with more than one barge were required to utilize an assist vessel on all lockages, while westbound tows passing without an assist boat were limited to one barge per turn. Tows moving eastward with lengths above 650 feet were required to use assistance, sources said. Waits were heard in a general 14-22 hour range for the week.

Ongoing size restrictions were also reported at Algiers Lock for the week. Tows wider than 60 feet were capped at 600-foot lengths, sources said, while tows with sub-60-foot widths were allowed strings up to 700 feet. The restrictions effectively limited tows to four standard barges or two 30,000 mt tankers per turn, although larger configurations were reported possible with the use of an assist vessel.

Most Algiers Lock waits were reported below five hours for the week, although rising waters in the forecast and expected detour traffic from Harvey Lock were expected to swell delays in the short-term.

Repairs in progress at Rigolets Bridge, located in the East Canal, were noted limiting access to and from the Pearl River through March 12. Navigation through the site was available three times per day, at 5:30 a.m., 1:30 p.m., and 9:30 p.m.

Sources reported weather delays and overnight fog slowing movements in the East and West Canal on March 9-12.

High-water conditions at Baton Rouge, La., triggered restrictions in the upper Gulf and lower Mississippi River during the week. Depths were reported crossing above the 30-foot action stage at Baton Rouge on March 8, returning a 30.71-foot reading on March 10. The gauge was expected to crest at 34 feet on March 20-22, just shy of the 35-foot minor-flood. Sources reported towing cuts of 5-10 barges from the typical 25-barge limit as a result.

Sources described five-hour wait times at Industrial Lock, while Calcasieu Lock movement typically tracked up to six hours for the week. Boats passing Brazos Lock reported intermittent delays up to 18 hours.

Mississippi River:

Moderate weather along the upper Mississippi River basin prompted a partially revised opening scheduled, sources said. Locks 13, 14, 15, and 19 continued to project a March 15 return to service, unchanged from one week earlier, while Lock 25’s reopening date was pushed forward to March 22 from March 31.

The change prompted shippers to begin accepting upper-river-bound barges loading from the Gulf on March 8 and March 9, sources said. Barges loading from St. Louis were projected to begin releasing as early as March 15.

The upper river’s Lock 21 was reported shut on March 8-12 for repairs. Lock 2, located at Mile 815.2 on the upper river, was anticipated to return from seasonal repairs and maintenance on March 19.

On the lower river, sources reported 5-10 barge towing reductions due to high water at Baton Rouge, Vicksburg, Miss., and Memphis, all reported above action stage on March 10. Memphis was forecast to move below action stage on March 16, while Baton Rouge and Vicksburg were projected to remain above their respective action stages through at least March 24.

Weather conditions prompted a delay to planned dike work at the lower river’s Mile 770, previously set to begin in late February. Now scheduled to begin in late March and run for about one month, the project will block southbound movements daily from 7:00 a.m. to 6:00 p.m.

Illinois River:

Utica Bridge demolition remains on hold due to cold weather, sources said. The project, previously scheduled for late February, will block navigation through the site for at least 24 hours during demolition and cleanup.

Wickets were reported down at Peoria Lock and LaGrange Lock, allowing vessels to pass both sites without locking. Wait times at Marseilles Lock were reported in the 6-13 hour range for the week.

Ohio River:

High water levels continued to impact operations on the Ohio River during the week. Southbound movements were permitted during daytime hours only through the harbor at Louisville, Ky., while elevated river gauge readings pushed Newburgh Lock into daylight-only travel restrictions until area readings fall below the 46.5-foot mark.

Navigation was reported to proceed normally through J.T. Myers Lock on March 10, although sources warned that a river surge above 46.5 feet would trigger restrictions. Levels were forecast to peak around 46 feet on March 9. Lockless travel continued at Olmsted Lock, where high water precipitated transit through the site’s nonlocking navigational pass.

The main chamber at Greenup Lock was closed from Feb. 19 through March 11 for repairs. Sources reported southbound tows passing the site during daytime hours only on March 9, with northbound vessels passing overnight. Most delays were quoted at 31-63 hours, while a number of intermittent stoppages were seen spiking to 4-6 days. Following the reopening of the main chamber, the auxiliary chamber is scheduled to shut from March 11 through April 11 for repairs.

The Meldahl Lock main chamber is scheduled to close from April 12 through June 11 for repairs to miter gate machinery. Traffic will pass through the 600-foot secondary chamber while the project is underway, leading sources to predict delays.

The secondary chamber at Markland Lock remains shut through approximately Oct. 29 due to structural damage to the miter gate. During the closure, tows are expected to lock through the primary chamber, with minimal delays predicted. Sources said the chamber was offline for the majority of 2020.

An auxiliary chamber closure at Smithland Lock reported in progress through April 1 was noted to include consecutive 30-day shutdowns of the lock’s two secondary chambers. Transit has continued through the primary chamber, with minimal delays reported. The secondary chamber at New Cumberland Lock closed to navigation on March 8 for repairs. The project is slated to conclude on June 10.

The main chamber at Cannelton Lock will close to all navigation from June 21 through Nov. 19, sources said, and extensive delays are predicted.

Wait times at the Tennessee River’s Kentucky Lock were reported up to nine hours for the week, falling from a peak of 33 hours in the prior report.

Cheatham Lock, on the Cumberland River, is scheduled to undergo a primary chamber shutdown from April 12 to June 3 for bio-acoustic fish fence (BAFF) repair. A total of three openings, each lasting four days, will be scheduled to clear waiting vessels during the stoppage.

Arkansas River:

Lock 3 experience intermittent navigation stoppages on March 1-11, ahead of a planned March 12-20 shutdown. The project is expected to completely block access to Little Rock, Ark., and above once underway. Sources said a dewatering and repair shutdown at Lock 6 is planned to run from Aug. 27 through Sept. 9.

ITC Finds Injury from Moroccan, Russian Phosphates; OCP Determined to Serve American Farmers

Featured, Morocco, News, Phosphate, Russia, Tampa, U.S., U.S. Imports

The U.S. States International Trade Commission (USITC) on March 11 determined that the U.S. phosphate industry is materially injured by reason of imports of phosphate fertilizers from Morocco and Russia that the U.S. Department of Commerce (DOC) has determined are subsidized by the governments of those countries. The Mosaic Co., Tampa, filed the complaint on June 26, 2020 (GM June 26, 2020)

Chair Jason E. Kearns, Vice Chair Randolph J. Stayin, and Commissioners Rhonda K. Schmidtlein and Amy A. Karpel voted in the affirmative. Commissioner David S. Johanson voted in the negative.

As a result of ITC’s affirmative determinations, DOC will issue countervailing duty (CVD) orders on imports of phosphate fertilizers from Morocco and Russia that will remain in place for at least five years.

Based on DOC’s final decision in February (GM Feb. 12, p. 1), the cash deposit rates for such imports are expected to be 19.97 percent for Moroccan producer OCP, 9.19 percent and 47.05 percent for Russian producers PhosAgro and EuroChem, respectively, and 17.2 percent for all other Russian producers.

“Mosaic employees are proud to support American farmers by producing high quality, reliable fertilizer,” said Mosaic President and CEO Joc O’Rourke. “Today’s decision upholds our belief that fair trade is a cornerstone of a healthy U.S. economy, and that American farmers will benefit from having a more competitive American fertilizer industry.”

“This decision comes despite the arguments presented by the OCP Group demonstrating that there is no basis for such duties, as well as significant voices opposed to Mosaic’s petition from across American agriculture – distributors, associations, and cooperatives – and elected officials in the Senate and House of Representatives,” OCP said in a statement, noting that the full details on the decision are expected in April.

“Despite this decision, OCP recognizes the supply challenges that American farmers face and is determined to serve them in the future, and will explore the most appropriate options to do so,” OCP added.

Russia’s PhosAgro and EuroChem had not responded to inquiries at press time.

As for OCP’s indications that it wants to still serve the U.S. market, J.R. Simplot Co., Boise, in March 8 final comments, said that regardless of ITC’s decision, the respondents would certainly ship phosphates to the U.S.

“The only effect of affirmative determinations here would be to impose the countervailing duties calculated by the Department of Commerce to ensure that subject producers do not obtain an unfair advantage in this market due to government subsidies,” Simplot said. Simplot argued that the respondents did not want to sell at a fair price, but instead to have unconditional access to the market so they may continue to engage in unfair trade.

Koch Fertilizer, Wichita, Kan., in one of its later filings, said the U.S. is the only phosphate fertilizer market that produces what it needs, but then exports a lot of what it produces so that imports are needed to satisfy U.S. demand. Koch in particular detailed Mosaic’s price advantage and commitment to shipping product to Brazil.

“Having decided to export significant amounts of U.S. production, Mosaic cannot now attribute its actions to imports,” said Koch. “It has a strategy in which it intentionally abandoned U.S. customers and should not be surprised that these customers have turned to imports for the product they need.”

ITC’s public report Phosphate Fertilizers from Morocco and Russia (Inv. Nos. 701-TA-650-651 (Final), USITC Publication 5172, March 2021) will contain the views of the Commission and information developed during the investigations. The report will be available on April 13, 2021, and can be accessed on the USITC website at http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.

SQM 4Q Income Flat; MOP/SOP, Lithium Volumes Surge

Chile, Earnings, News, Potash Muriate, Specialty, Sulfate of Potash

SQM Inc., Santiago, reported flat fourth-quarter net income of $67 million ($0.25 per share) on revenues of $513.8 million, nearly flat with the year-ago $66.9 million ($0.25 per share) and $472.2 million, respectively. Gross profit was off at $132.5 million from $137.8 million.

Despite the flat income, fourth-quarter volumes were up 134 percent for lithium, 71 percent for MOP/SOP, and 28 percent for industrial nitrates. Specialty plant nutrition volumes were up just 4 percent, while iodine was off 30 percent.

SQM said the quarter set a quarterly record for lithium sales volumes. The company said it sold 25,800 mt, up 50 percent from the third quarter; year-ago sales volumes were 11,000 mt. SQM said volumes grew 43 percent for the year, despite the market only growing 6 percent. The company said 2020 lithium production surpassed 70,000 mt in 2020 and they expect more than 80,000 mt in 2021. SQM expansion plans target 180,000 mt/y of production by the end of 2023.  

SQM said fourth-quarter lithium prices were stable around $5,300/mt, and it believes this could be the bottom of the decreasing pricing trend and that prices could be higher in first-half 2021.

Fourth-quarter MOP/SOP volumes were 244,600 mt, up 71 percent from the year-ago 143,000 mt. Revenues were up 33 percent, to $66.3 million from $49.9 million.

Specialty Plant Nutrition (SPN) segment volumes were up 4 percent in the fourth quarter, to 265,200 mt from 254,100 mt, with specialty blends seeing an 18 percent uptick to 77,800 mt from 65,800 mt. Potassium nitrate-based volumes were up 1 percent, to 136,700 mt from 135,900 mt. Total SPN revenues were up 4 percent, to $179.1 million from the year-ago $172.8 million.

Full-year SPN volumes were off 1 percent, to 1.036 million mt from 2019’s 1.042 million mt. While specialty blends were up 14 percent to 271,300 mt from 238,900 mt, potassium nitrate-based volumes were down 7 percent, to 575,200 mt from 617,400 mt.

SQM said it believes overall SPN market growth was 5 percent in 2020, and it expects to see the same rate in 2021. It said fourth-quarter pricing was up 4 percent over the third quarter.

Full-year net income was down at $164.5 million ($0.63 per share) on revenues of $1.82 billion from the year-ago $278.1 million ($1.06 per share) and $1.94 billion, respectively. The company said net income was affected by a settlement fee related to a class action lawsuit against the company in the U.S. which had a one-time before tax effect of $62.5 million (GM Nov. 13, 2020).

Full-year gross profit was $482.9 million, down from 2019’s $560.1 million. For the year, segment contribution to consolidated gross profit included: Lithium 18 percent, SPN 34 percent, Iodine 34 percent, MOP/SOP 5 percent and Industrial Chemicals 9 percent.

Agrellus Adds Three Retail Businesses to Platform

News, News Briefs, Southwest

Agrellus Inc., the Lubbock-based e-commerce business and online marketplace for crop inputs, has reported the addition of several ag retail companies to its sales platform. These include Crescent Star Ag, Spearman, Texas; Horton Seed Services, Leoti, Kan.; and Wells Ag Supply, Fonda, Iowa.

Crescent Star Ag is a farm inputs retailer serving grower in the Texas Panhandle, Oklahoma, and Kansas. Horton Seed Services is a wheat seed sales, treating, and cleaning business, and Wells Ag Supply is a full-line farm inputs retailer offering fertilizer, ag chemicals, seed treatment, and biologicals to Iowa growers.

“2021 has already become an active year for certifying dealers on the Agrellus Platform,” said Agrellus CEO Chris Johnson. “We are truly excited that they understand that Agrellus is not another retail competitor and actually works directly for them.”

Agrellus offers seed, fertilizer, chemicals, irrigation parts, fuel additives, and custom application services from its online platform, which was launched in early 2017. Agrellus utilizes existing ag retailers and retail locations on its online and mobile platform, and charges no membership fee for participating retailers or grower members.

“Agrellus never competes with any retailer,” said Rusty Andrews, Agrellus Chairman. “We simply provide a mobile and web platform where a grower is confident they can get the best value from high quality retailers they already trust, and work with, in the current distribution channel.”

Illinois Fertilizer and Chemical Association – Management Brief

Eastern Cornbelt, Management Briefs

Jean Payne will be retiring from her position as President of the Illinois Fertilizer and Chemical Association (IFCA) on March 31, 2021. Payne has served 23 years with IFCA, 17 as President.

The organization highlighted her achievements in securing the Hours of Service Exemption; battling ammonia theft for methamphetamine production; eliminating license plate requirements for fertilizer wagons and floaters; creating the Nutrient Research and Education Council to address water quality issues in the state; and facilitating training and safety through the Asmark Institute.

The IFCA Board of Directors voted unanimously on Feb. 3 to make Kevin “KJ” Johnson Interim President for 12 months beginning on April 1, 2021. Johnson has served as IFCA’s Director of Government and Industry Relations for the last eight years.

Landmark Services, Countryside Complete Merger

Featured, News

Landmark Services Cooperative and Countryside Cooperative, two regional co-ops based in Wisconsin, announced on March 1 that they have officially merged. Countryside members voted to support the merger last August after the boards of directors of both organizations agreed in March 2020 to pursue unification (GM March 6, 2020). The boards and CEOs had earlier signed an official Letter of Intent on Oct. 24, 2019, to explore a merger.

“Landmark and Countryside are committed to proactively facing the challenges in the marketplace and helping our members and employees thrive,” said Jim Dell, Landmark CEO and President, who will hold the same positions with the new cooperative. “The board and employees of the new cooperative will live the mission of ‘advancing our customers through innovative and responsible solutions’ while focusing on our vision ‘customer success powered by engaged employees,’ and all while adhering to our values of safety, integrity, passion, accountability, and financial responsibility.”

The new cooperative is headquartered in Cottage Grove, Wisc., and will continue to maintain operations and staff at more than 50 locations, serving over 26,000 members across southern and west-central Wisconsin, northern Illinois, eastern Iowa, and eastern Minnesota. The combined business will employ more than 800 full-, part-time, and seasonal workers, and will generate annual sales in excess of $600 million.

The boards highlighted numerous advantages for the merged business, including increased size and scale for greater purchase volumes and negotiation opportunities; efficiencies gained through lower operational and production costs and the sharing of agronomy assets; improved logistics to reduce delivery issues; backup feed mill options and increased grain marketing opportunities; expanded input financing options for members; enhanced product and service offerings; and the ability to attract and retain employees by offering competitive salaries and benefits.

“As we focused on the benefits the merger would bring, we quickly realized that growing together would only make us stronger,” said Landmark Board Chairman Jim Lange. “The board is excited for what the weeks, months, and years to come will look like for the new co-op.”

The new cooperative is working with an external marketing agency to develop new branding and a new trademark name and logo, which will be announced later this year. For now, the business will be co-branding digital platforms and documents such as statements.

“The boards of directors feel positive about this decision to merge two strong organizations,” said Countryside Board Chairman John Creaser. “This decision allows the new cooperative to compete within the ag industry while being profitable and protecting our members’ equities.

Landmark operates grain, agronomy, animal nutrition, energy, and retail divisions from more than 20 locations in south-central Wisconsin and northern Illinois. The company also provides agricultural financing and ag insurance products and services through its Verity Business Solutions LLC. Countryside, which was formed in 1998 through the merger of Durand Cooperative and Mondovi Co-op Equity Association, operates agronomy, feed, grain, energy, retail, and convenience store divisions from some 30 locations in west-central Wisconsin.

A comparison chart provided by the two co-ops earlier in the merger process said the combined organization would have budgeted 2020 volumes of 167,800 tons of dry fertilizer, 69,547 tons of liquid fertilizer, 3,793 tons of ammonia, 172,080 tons of feed, 29.2 million bushels of corn, 7.7 million bushels of soybeans, and 965,000 bushels of oats, wheat, and barley. In the energy division, combined 2020 budgeted volumes were identified at 5.6 million gallons of gasoline, 28.4 million gallons of fuel oil, and 27.7 million gallons of liquid propane.

Uralkali Moves to Red on Forex, Derivative Losses; Exports Up 36 Percent

Earnings, News, Potash, Russia

Uralkali, Moscow, moved into the red in FY2020, reporting a IFRS net loss of $43 million, versus a prior-year net profit of $1.22 billion. In its earnings statement, the company cited mainly foreign exchange losses and losses on revaluation of derivatives totaling $733 million as behind the profitability downturn.

The company saw EBITDA fall 23 percent, to $1.22 billion, down from the year-ago $1.58 billion, while revenue dipped 3 percent, to $2.7 billion from $2.78 billion.

Potassium chloride production increased 2 percent to 11.3 million mt last year, up from the previous year’s 11.1 million mt, while sales volumes were up by close to 30 percent on the year, to 12.7 million mt from 9.8 million mt.

The biggest increase was in export sales volumes, which rose 36 percent to 10.1 million mt, up from 7.4 million mt, which the company attributed mainly to the recovery of demand and “the favorable environment” in the global potash market.

While Uralkali did not provide regional sales volumes figures, revenue from sales to China, India, and Southeast Asia in aggregate were up 38 percent year-over-year to $1.01 billion, while revenue from sales to Latin America and the U.S. was down 26 percent, according to the company’s consolidated financial statements for FY 2020. Revenue from sales to Europe and other countries increased 5 percent over the prior year.

Proportion of revenue by region (percent)

  FY2020 FY2019 % year-on-year change in sales revenues
Russia 17 21 (19)
China, India, and Southeast Asia 37 26 +38
Latin America and the U.S. 30 38 (26)
Europe, other countries 16 15 +5
Total revenues 100 100 (3)

Sales to the domestic market increased 8 percent over last year, to 2.6 million mt, up from 2.4 mt, with the company citing increased supplies to agricultural producers.

However, the average export price per mt of potassium chloride on FCA terms declined 29 percent year-over-year to $166/mt, down from $235/mt in 2019, reflecting the price changes in international markets.

“In general, 2020 saw a gradual recovery of demand for potash in most key markets, which in turn had a positive impact on last year’s pricing,” said Uralkali CEO Vitaly Lauk. “We are optimistic about the potash industry’s dynamics in 2021 and believe that both short-term and mid-term positive market conditions will be preserved.”

The potash producer estimates that global potash deliveries last year increased to 67 million mt, up from 64 million mt in 2019.

For 2021, Uralkali said it expects global potash demand to remain at a high level amid supply availability, favorable weather, and major crop expectations, and estimates global potash sales increasing to 68-69 million mt this year.

Uralkali’s net debt stood at $4.195 billion as of Dec. 31, 2020, and its net debt/EBITDA ratio increased to 3.43x (End 2019: 3.07x).

Since early December last year, Uralkali has been majority owned by Dmitry Mazepin’s Uralchem, when Mazepin/Uralchem increased its stake to 81.47 percent from 46.4 percent (GM Dec. 4, 2020). Just the week before, Uralkali named Vitaly Lauk as the potash company’s new CEO, replacing Dmitry Osipov, who had been in the position since December 2013 (GM Nov. 27, 2020).

OCP, Nigeria Ink Agreements to Advance Ammonia and Fertilizer Projects

Africa, Featured, News, Nigeria

OCP Africa, a wholly owned subsidiary of the OCP Group, and the Nigeria Sovereign Investment Authority (NSIA) on March 2 inked a Shareholders Agreement for the creation of a joint venture company (JVC) that will oversee the development of an industrial platform to produce ammonia and fertilizers in Nigeria.

The OCP subsidiary also signed a Framework Agreement with Mobil Producing Nigeria (MPN), the Nigerian National Petroleum Corporation (NNPC), the Gas Aggregation Company Nigeria (GACN), and the NSIA on gas supply for the industrial platform.

The agreements were signed during a top-level Nigerian delegation to Morocco, chaired by Nigeria’s Minister of Petroleum Resources Timipre Marlin Sylva. The business visit ran March 1 to March 6, as part of the partnership between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry, OCP said in a statement.

A further Memorandum of Understanding (MOU) was inked on March 2 between OCP Africa and NSIA and the NNPC to evaluate the opportunity of an equity investment by NNPC in the JVC and for its support on gas. Additionally, an MOU Understanding was signed between OCP Africa, Nigeria’s Akwa Ibom State, and the NSIA on land acquisition for the new production facilities, administrative facilitation, and common agricultural development projects in Akwa Ibom State.

The goal of the project, which has been under discussion for some while, is to develop a multipurpose industrial platform in Nigeria, which will utilize Nigerian gas and Moroccan phosphate to produce 750,000 mt of ammonia under a first phase development and 1 million mt of phosphate fertilizers annually from 2025, said OCP in its statement.

The Moroccan group and NSIA back in June 2018 inked an MOU to develop an industrial platform in Nigeria for the production of ammonia and related products (GM June 15, 2018).

The NSIA, OCP, and NNPC will fund the $1.4 billion first phase of the project, according to an NSIA statement. The Nigerian investment body said the ammonia plant will have production capacity of 1.5 million mt/y to be built in two phases, with 70 percent of the output allocated for export to Morocco. The balance will be used in the production of 1 million mt/y of DAP and NPK fertilizers for supply to Nigeria’s domestic market.

OCP previously had said some of the ammonia output from the proposed plant would be exported to Morocco for the group’s own use (GM Jan. 18, 2019). OCP currently imports all its ammonia requirements, last year, importing just under 1.9 million mt, according to Trade Data Monitor.

A dedicated jetty to facilitate imports of raw materials from Morocco and other suppliers and to export excess ammonia and fertilizer to Morocco and potentially other regional markets will be built as part of the project, NSIA said.

According to the investment authority, project construction is expected to start no later than the third quarter of 2021, with a 2025 operations start date target.

The project “is structured to commercialize Nigeria’s vast natural gas resources and satisfy Morocco’s demand for cost-competitive ammonia,” said NSIA.

Morocco and Nigeria at the end of January this year renewed their commitment to joint efforts towards the realization of strategic development projects that included building an ammonia and fertilizer plant in Nigeria and a Nigeria-Morocco natural gas pipeline (GM Feb. 5, p. 1). Morocco’s King Mohammed VI and Nigerian President Muhammadu Buhari had agreed to speed up efforts to launch a fertilizers complex.

The newly signed agreements this week form part of the next steps following the success of the first phase of the Presidential Fertilizer Initiative (PFI) signed between Morocco and Nigeria in December 2016 and the progress of the fertilizer production plant project launched in June 2018 by OCP and the NSIA (GM June 15, 2018), OCP said in this week’s statement.

As part of these next steps, OCP Africa, the Fertilizer Producers & Suppliers Association of Nigeria (FEPSAN), and the NSIA have signed an MOU in order to commit to the second phase of the Nigerian PFI.

Back in 2016, OCP Group first partnered with the Fertilizer Producers & Suppliers Association of Nigeria (FESPAN) under the Presidential Fertilizer Initiative (PFI), supported by the NSIA (GM Dec. 6, 2016; May 19, 2017). This collaboration stretched across the entire agricultural value chain, from the introduction of customized fertilizers adapted to local soils and crops to improving the availability of fertilizers in the local market at competitive prices.

These investments have increased the local production capacity to more than 5 million mt/y, allowing Nigerian farmers better access to quality fertilizers, according to OCP.

In line with this, three blending facilities are currently under construction by the OCP group in Nigeria’s Kaduna, Ogun, and Sokoto states, due to start this year (GM March 18, 2019). Together, they will have total production capacity of 500,000 mt/y of fertilizers.

Ma’aden to Reach 85 Percent of Capacity by Year-End, Report Clarifies

News, News Briefs, Phosphate, Saudi Arabia

Saudi Arabian Mining Co. expects its majority owned Ma’aden Wa’ad Al Shamal Phosphate Co. (MWSPC) facilities to reach 85 percent of capacity by the end of this year, up from the current 70 percent, and hit its full capacity of 3 million mt/y of fertilizer by the first quarter of 2022, according to Saudi Arabian financial news portal Argaam, citing Ma’aden CEO Mosaed Al-Ohali in a Reuters report.

Al-Ohali told analysts at a company earnings call last month that MWSPC is currently operating at around 60 to 70 percent of capacity, and said remediation work continues at the facilities (GM Feb. 12, p. 37). The CEO confirmed the technical issues at the operations are not in one specific location.

He said the company expected to see most of the increased capacity benefits coming in 2021 and next year, and expected MWSPC to be exceeding its 3 million mt/y phosphate fertilizer design capacity by 2025.

MWSPC commenced “commercial” production of DAP in December 2018. The Mosaic Co. and SABIC own 25 and 15 percent stakes, respectively, in the company.