The International Fertilizer Industry Association (IFA) released its Medium-Term Fertilizer Outlook 2012-2016 in mid-June, reporting that demand for fertilizer is steadily increasing in response to supportive agricultural market fundamentals, while expansion of supply is still delayed because of schedule slippages for about half of projects.

IFA said tight market conditions for corn and oilseeds provide strong incentives for farmers to increase productivity and optimize their return. As a result, world fertilizer demand is seen as up by 2.8 percent in 2011/12, and by another 2.5 percent in 2012/13, reaching 181 million mt of nutrients (nitrogen, phosphate, and potassium). When compared to 2007/08 before the economic downturn, IFA said world fertilizer demand is anticipated to have fully recovered by 2012/13, including for potash. During this five-year period, South Asia alone is forecast to account for approximately 60 percent of the net increase in global demand.

World demand is projected to reach 193 million mt by 2016/17, corresponding to a compound annual growth rate of 2.1 percent from 2009/10 to 2011/12. IFA said the average annual growth will be stronger for potash (3.7 percent per year) than for phosphates (2.3 percent) and nitrogen (1.5 percent) because the nitrogen and phosphate markets have recovered faster than potash, and because there is an urgent need to rebalance fertilization to the benefit of potash in several developing countries.

“In the next five years, reduced inventories and strong crop prices are expected to persist in the agricultural commodity markets because of the need to supply the fast-rising food, feed, fibre, and bioenergy markets,” said Patrick Heffer, director of the IFA’s Agriculture Service. “This is anticipated to stimulate fertilizer demand, but high crop price volatility could result in significant year-on-year variations.”

Contrary to historical trends, IFA said Asia’s weight in regard to global growth is progressively declining, while Latin America is seen as reinforcing its position as an engine of future expansion. Demand is anticipated to rise firmly in Eastern Europe and Central Asia, as well as in Africa. In volume terms, IFA said East Asia, South Asia, and Latin America together would account for three-quarters of the increase in world demand during the next five years.

On the supply side, global total nutrient sales for all uses reached 221 million mt nutrients in 2011, increasing 4 percent from 2010 due to firm demand in the fertilizer sector and a gradual recovery in the industrial segments. World total nutrient sales in the fertilizer and industrial sectors in 2016 are forecast to grow at an average annual rate of 1.8 percent, to 245 million mt nutrients in 2016.

Close to 250 new fertilizer plants are projected to come on stream over the next five years, corresponding to a total investment in excess of US$90 billion. However, about half of these projects have faced delays of 6 to 18 months. Schedule slippages have slowed down the projected growth of capacity and have led to more balanced market conditions in the short term, IFA said, while lowering the levels of potential surpluses in the near term.

According to IFA, global nitrogen capacity is projected to expand 17-25 percent compared with 2011, leading to large potential surpluses by 2015. Phosphoric acid and phosphate fertilizer capacity would expand by 20 percent, but global phosphate demand is projected to grow at similar rates, thus absorbing most of the projected incremental supply. In the potash segment, world capacity may increase by 42 percent, while demand expands by 14 percent. IFA cautioned, however, that most potash projects suffer from delays, slowing down the emergence of massive surpluses in the short to the medium term.

In the near term, IFA said that trade prospects appear strong for m

FMC Corp. intends to contest in the U.S. federal court system a Shoshone-Bannock Tribal Court of Appeals ruling that FMC must continue to pay the Shoshone-Bannock Tribes $1.5 million annually for waste stored at the site of FMC’s closed elemental phosphorus processing plant west of Pocatello, Idaho.

The tribal appellate court announced May 11 that the tribes retain jurisdiction on the property within the Fort Hall Indian Reservation and that the company must adhere to tribal environmental laws.

Shoshone-Bannock Tribal Council Chairman Nathan Small welcomed the ruling, saying businesses conducting activities within the reservation’s boundaries must be subject to tribal law. FMC spokesman Paul Yochum called it disappointing.

The ruling comes on the heels of the U.S. Environmental Protection Agency’s (EPA) April approval of an Interim Record of Decision that would cap rather than extract radioactive slag, buried phosphorus, and heavy metals that remain at the FMC site.

Shoshone-Bannock officials called the EPA “cap and retention” cleanup decision short-sighted. They had urged that the waste be removed rather than left on the FMC property for fear it would contaminate the nearby Portneuf River that runs through the reservation. They argued that FMC’s massive profits made from its elemental phosphorus operations should be spent on completely cleaning up the property.

From 1947 to December 2001, FMC operated the world’s largest elemental phosphorus plant. All of its structures, including four massive electric furnaces, were torn down and removed by 2006. Zoned heavy industrial, the property retains an estimated $12 million in assets, including about $10 million in rail infrastructure.

The FMC plant’s closure was a major economic blow to the area. In 2000, the FMC plant and its related phosphate mining operation boasted a payroll of more than $42 million and an average salary/benefit package of more than $70,000 per employee. More than 300 worked there when the plant was shut down.

The FMC site and the adjacent J.R. Simplot property, where a phosphate fertilizer complex continues to operate, were designated as the Eastern Michaud Flats Superfund site in 1990. The Simplot plant in Power County lies outside the reservation, unlike the 1,400-acre FMC property that straddles that county and the reservation.

Begun in 1998 when an EPA Record of Decision was signed, the case involves whether the Shoshone-Bannock Tribes have jurisdiction over FMC, which has owned fee land on the reservation. FMC and the tribes agreed that year to a jurisdictional dispute compromise, which entailed FMC paying the tribes $1.5 million annually for wastes generated by the plant’s operation and the tribes agreeing FMC would be exempt from tribal waste-related ordinances.

FMC officials said that agreement was needed to keep the plant operating, but it was terminated when the plant shut down more than 10 years ago because FMC was no longer generating the waste. FMC ponds used to manage wastewater were capped and closed under a Resource Conservation and Recovery Act (RCRA) consent decree.

In 1998, FMC paid $11.9 million – the largest civil penalty settlement ever at that time – under a 1976 hazardous waste law. It also had to cap the ponds, which had caught fire at times over the decades. Construction of the pond caps was completed by 2005.

Yochum said the tribal appellate court’s decision represents one step in a lengthy litigation process that started in 2005, when U.S. District Judge Lynn Winmill ruled in favor of tribal jurisdiction over FMC and compelled FMC to apply for a tribal special use permit.

FMC then exhausted tribal administrative and judicial remedies before seeking further review of the tribes’ jurisdictional and other claims in federal court.