Market Fundamentals

World population is increasing each year...By 2050, the United Nations (UN) forecasts that the world will be home to over 9 billion people, or some 2.2 billion higher than in 2010, more than double the current population of China. In addition, the UN’s Food and Agriculture Organization (UNFAO) estimates that around 17% of the global population is malnourished.

Amount of cultivable land is declining… As the population grows and cities expand, the amount of land available for cultivation is shrinking. The UN forecasts that by 2050 around 70% of the world’s populations will be living in cities. Over the next 20 years, the UNFAO estimates, the amount of cropland will shrink by 1.2 million hectares a year.

Demand for foodstuffs is growing… Taking 2005-07 as a base, the UNFAO forecasts that global food consumption will rise by over 40% by 2030 and 70% by 2050.

Diets are changing… As incomes rise, diets in developing countries are improving, and the consumption of meat, fruit and vegetables is growing. According to the UNFAO, around 65% of the world’s population lives in countries that are impoverished and have a shortage of food.

Production of biofuel is rising… The governments of many countries are encouraging greater biofuel production to increase the share of renewable energy sources and reduce dependency on fossil fuels. Over the next five years, the annual production of bioethanol and biodiesel is forecast to soar by almost 60%. The main raw materials used to make biofuels are soya beans, corn, wheat, barley and sugar beet, among others.

Demand for mineral fertilizers is rising... Humans’ growing needs for food, clothes and energy sources require ever-greater productivity from agricultural land. Using mineral fertilizers is the most widespread and efficient way of ensuring higher yields from smaller land plots.