GPCA Insight speaks to Abdulrahman Al-Suwaidi, CEO, QAFCO, and Chairman of the GPCA Agri-nutrients Committee, about the role of the GCC agri-nutrient industry in supporting food security, as well as the emerging trends and challenges in the agri food chain and how they impact regional producers
Globally, more than 800 million people, or about 10.8% of the world’s population, suffer from food insecurity. The GCC region is a major producer and exporter of agri-nutrients to the world. What is the region’s role in helping to achieve global food security and what more can be done to realize this important objective?
It is well understood that mineral fertilizers are necessary to support growing the crops needed to feed the world’s increasing population, some studies have suggested that about half of the world’s population is sustained with food grown using fertilizers.
In 2020 alone, the GCC exported over 15 million tonnes urea of the 52 million tonnes traded globally. The GCC accounted for approximately 30% of the global trade of this vital agri-nutrient (nitrogen). The region also produces other essential agri-nutrients such as Monoammonium Phosphate (MAP) and Diammonium Phosphate (DAP). Therefore, the GCC shall continue to produce and export high quality agri-nutrients to support meeting the world’s food security needs.
As a next step, regional producers can assess how their products may be enhanced to improve Nutrient Use Efficiency with the objective of increasing crop yields or reducing the amount of agr-nutrients required.
From an advocacy perspective, even with improved efficiency agri-nutrient products, regional producers can do more to ensure farmers are made aware of agricultural best practices and proper agri-nutrient application.
What are some of the key enablers and measures that need to be introduced in order to enable a robust and healthy agri-nutrients industry in the GCC (i.e., building the right infrastructure, conducive government policies and regulations, feedstock availability, optimizing the agri-nutrients supply chain, etc.)?
The importance of the GCC region in the global agri-nutrients market becomes more and more apparent as time goes on. It has demonstrated itself to be a reliable producer and supplier even in the face of the greatest challenges such as the ongoing pandemic.
The industry has also learned some important lessons during the past two years. Firstly, we need to engage more with our customers, review and enhance the agri-nutrients supply chain (such as optimization of logistics, storage and distribution). Secondly, the GCC agri-nutrients industry could benefit from focus on international trade policies with major agri-nutrient markets to encourage trade.
With the above approach, the industry should be able to optimize its value chain to farmers in a sustainable and competitive manner.
Could you tell us a little bit more about QAFCO’s latest initiatives and plans? What is your current strategy to grow the company’s competitiveness and expand your market presence globally – whether through gaining access to new export markets or establishing presence in local markets for closer customer proximity?
QAFCO works closely with its marketing partner, Muntajat, to continually monitor market conditions. This partnership has been very successful in ensuring QAFCO is well represented in the world’s major markets. Furthermore, QAFCO and Muntajat conduct regular assessments to understand emerging market dynamics to identify potential opportunities. The viability of extending further down the agri-nutrient value chain is being explored as suggested in the previous question, but this must be in consideration with QAFCO and Muntajat’s combined strengths.
What are your thoughts on the latest green and blue ammonia production trends? Do you view them as a major development poised to change regional agri-nutrients production, making it more sustainable, and do you see regional producers adopting these trends in the future?
Investments in green and blue ammonia are interesting and should be watched closely. Although the technology for green ammonia is proven, there are still quite a few challenges to be overcome. The greatest challenge for some time will be the high cost of green ammonia and whether enough customers are willing to accept the costs to encourage further investment by producers. For green ammonia to become truly sustainable, all stakeholders need to be engaged and involved from regulators, technology providers, producers, and customers.
Given time and resources, I do believe that the cost of green ammonia can be optimized, but this will depend on the collaborative efforts of all involved parties. In the interim, the blue ammonia market could be developed as the costs are somewhat lower than green ammonia, but the market still needs to be willing to accept paying the high margin of blue ammonia relative to grey ammonia.
With respect to the agri-nutrient industry, it is still a bit early to predict the impact of green and blue ammonia. Farmers are very cost conscious and there are different technologies available in the market which improve environmental performance of agri-nutrients.
Although the global agri-nutrient market is large, stable and reasonable growth is forecast, I believe we must continue to serve the agri-nutrients market in a meaningful manner while simultaneously monitoring the blue/green ammonia market and engage actively in its development.
The uninterrupted supply of agri-nutrients from the region to different parts of the world during the coronavirus pandemic was essential to ensure food security was maintained at a time of great supply chain and trade disruptions. How important are global trade regulations to meet growing food demand particularly in countries with high rates of food insecurity and growing populations?
There are many links in the food supply chain. Ensuring sufficient supply of the materials necessary to grow food is a critical part of that chain and focus on international trade policies between agri-nutrient producers and major agricultural markets could certainly support meeting growing food demand.
That being said, there are other critical links in the food supply chain which need the attention of all stakeholders. Efforts must be made to reduce food loss (the decrease in the quantity or quality of food resulting from decisions and actions by food suppliers in the chain, excluding retailers, food service providers and consumers – FAO SOFA, 2019) and food waste (the decrease in the quantity or quality of food resulting from decisions and actions by retailers, food service providers and consumers – FAO SOFA, 2019). Just as an example, in 2016 France passed a law making it illegal for supermarkets to destroy unsold food products and compelling them to donate it. Focus in these areas can help alleviate food security needs.
As the Chairman of the GPCA Agri-nutrients Committee, could you share your perspective on the role of the Committee in advocating industry’s role in the region and globally, and safeguarding its interests and what sort of areas are you seeking to focus on in the near term?
The Committee has a responsibility to raise awareness both regionally and internationally regarding the critical role of mineral fertilizers in addressing global food security. Mineral fertilizers applied correctly can be instrumental in ensuring healthy, nutritious food is available in sufficient quantities for the world’s growing population.
The Committee also needs to acknowledge the growing focus on sustainability, ethical business, and environmental responsibility. We should showcase the efforts and investments into adopting the latest technological innovations and improvements in regional production facilities to enhance the energy intensity of production processes and reduce harmful emissions.
From a market perspective, the Committee needs to encourage dialogue among stakeholders on how to meet the demand for more efficient agri-nutrient products and reduce their overall carbon footprint.
The GPCA platform and the annual Agri-Nutrients Conference are excellent vehicles for addressing these objectives and the Committee will ensure that the role of the GCC agri-nutrients industry in addressing the needs of the global agri-nutrients market in a sustainable, competitive and responsible manner is well-communicated and understood by all stakeholders.
