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OCCASION This Publication Has Been Made Available to the Public on The OCCASION This publication has been made available to the public on the occasion of the 50th anniversary of the United Nations Industrial Development Organisation. DISCLAIMER This document has been produced without formal United Nations editing. The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialized” and “developing” are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not constitute an endorsement by UNIDO. FAIR USE POLICY Any part of this publication may be quoted and referenced for educational and research purposes without additional permission from UNIDO. However, those who make use of quoting and referencing this publication are requested to follow the Fair Use Policy of giving due credit to UNIDO. CONTACT Please contact [email protected] for further information concerning UNIDO publications. For more information about UNIDO, please visit us at www.unido.org UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria Tel: (+43-1) 26026-0 · www.unido.org · [email protected] 0K66 m nMVY IVrV WTOWATtOW MOWTMAl OEVtLOPMfNT OMAIMZATIOíGHMP v MOOUL CMMftATION M CHtMICAL HftTLIZIft * «I MO* ra*n ft»*! tut Nr «ìOMM tf *• IMNIN tMMw^HeAr. OìSrt UNIDO Distributi .n: Restricted UNITED MATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION UNIDO/ESCAP DP/CFPD/3 ESCAP 3 February 1976 ECOMOMIC AND SOCIAL COMMISSION FCP. AS If ANO THE PACIFIC ORIGINAL : ENGLISH PRIORITY PROJECT m REGION»! CO-CPERATION IN CHEMICAL FERTILIZER PRODUCTION AND DISTRIBUTION (RAS/7V045) REGIONAL CO-OPERATION IN CHEMICAL FERTILIZER Note; The paper reports on c joint UNIDO/ESCAP Priority Project en Regional Co-operation in Chemical Fertilizer Product i >n únd Distribution, financed by UNDP as RAS/7V045 and conducted in the ESCAP region during 1975. It has not been cleared by the Office of the Executive Secretary of ESCAP and editing and translation are not required. Ff RE''CRD 1. This paper, authored jointly by Che United Nations Industrial Development Organization and the Economic and Social Commission for A"ia and the Pacific represents the final phase o<" t Hr Priority Project M Regional Co-operation n Chemical Fertilizer Production and Distribut;on on which the two agences collaborated in 1975- The project, which included country mi osions, the preparation of several papers and the convening of an Expert Group, was undertaken ir response to requests by its Member <iovcrn- ments that ESCAP explore the possibilities for regional co-operation to deal with some of the ser'our. problems involved in the supply of fertilizer and other agricultural requisites in order to raise food output on Asian farms. The project commenced during the waning of tht "fertilizer cri"is", brought about by short supplies and high prices of fertilizer. At this time, governments of developing ESCAP countries were implementing extensive piano to expand domestic production, in order to reduce the r dependence on imported supplies and to exploit ••heir own raw material", for f. rtilizer production. These plans include br'nging about 7 million tons/year of new nutrient production capacity on stream in nin. countries by 1980, in addition to large expansions expected in China and other social is* countries. 2. For this reason the paper deals with two sepnrott periods: th. fertilizer situation towards the end of the present decade and additional investment required to attain regional self-sufficiency during the eighties. An introductory Part A tracer the main features of the problems which have occurred in the first half of the seventies and outlines the various efforts which have been made internationally to help ensure adequate food and fertilizer supplies. It else describes the difficulty and importance of forecasting demand accurately before investment plans arc finalized, and indicates the approximate magnitude of demand in the region over the next 15 years, using official estimates and other opinion. The avoidance of unsaleable surpluses and the identification of export markets both require more accurate demand predictions, „specially in the light of the cost and supply considerations which arc treated n Part B. Th«.se considerations include the results of present investment plans, the endowment and relative cost of raw materials in the ESCAP region, and tht huge investment and production costs involved in producing chemical fertilizers in modern plants. /3- I V - 3, On the basis of the demand, supply and cost considerations raised in the first twe parts, Part C discusses the supoly-denand balances which are likely to occur in each of 11 bSCAP countries, indicates the •mount of additional capacity which woulo b<- necessary for each tn be self- sufficient, dnd explores ttV scope Toe intraregional trad*, in order to better exploit comparative advantage to gain cheaocr supplies. Necessarily these discussions are based on a fairly arbitrary itkction of supply and demand possibilities, and therefore arc illustrativ«, rather than predictive. The need for TíO re extcns.v and precise men i toeing and forecasting of trends affecting th. industry cannot be too greatly emphasized. The last chapter in Part C continues the. trade discussion by arguing the scope for subregional arrangements which would boch protect the investment made in production for txpo-t and ensure that imports from neighbours be as secure as less efficient domestic production would. In the final Port D various forms of regional co-operation are rccononended, incl'jdinj br.th subregional economic c !' ' .". ;'.n --•-! re;i r;.v. .tivities t. comp'e-.cnt ,:/f rnnl finnncinl and technical 4 flssistrn'o '• i ;'" ' .'c'. :,nul:. rs, >L the pn du-1 i vi ty r-f existing and new der.>tic fértil ¡A.r o 1 ant s in the region k. Th'. pap •..¡•'s "jmrnciry Dtid RLComm.ndat i ons , which immediately follow this Foreword, have t .en distributed already to rSCAP Member Governments as document no. E/CN.11/L Ml?/! MF for the XXXIInd Session of the Commission. The full Dapcr is also be ï ig distributed in o "der that serious consideration of the recommendrtion- ¿rising out of the Priority Project may be assisted by an understanding ot the problems which they arv. designed to solve or avoid through prompt anticipation. There is scope for the Jeve 1 opmtr.t of a hejlthy c'.v-w'x ecl fertilizer industry in the ESCAn region and its contribu- tion to the feneration of domestic food supplies ard e;<chenge~carr ing agricultural produce must no' be endangered by a fdilur<_ to fr.surc maximum efficiency for it. r 5. The paper includes also, as Atincx ">! . P ¡". "' Report dealing with procedural aspects of the Priority Project, MS well. I would like to acknowledge ?t this ooint the major extra-budgetary assistance by the United Mations Development Programme which enabled the project to be carried out. /It - V - It is also desirable to express the appreciation of the ESCAP Secretariat for the important cnntribuüon made by the Chi ;f and officers of the Fertilizers, Pesticides and Petrochemical Industries Section of UMIDO, which assumed the responsibility of executing the project in co-operation with ESCAP. Harmonious co-operation betw.cn the UNIOC qroup and th.. ESCAP Task Force on Fertilizers an I Ayriculturai Chemicals has contributed greatly to the quality of the work done, as has the very h lpful participa- tion of officials of many Member Governments and several international agencies. Finally, I would like to thank the experts who lent their wisdom to form a very constructive Expert Group, and the several consultants who brought considerable expertise to the analysis and recommendations formulated in the course of the project. J.B.P. Marami s Executive Secretary United Nations Economic and Social Commission for Asia and the Pacific /SUHHARV - Vil - STUART AND RBCOHE'TT. .TTC.'] '* 1. The import*n-e of dorestio food product ¡en \r. •-• -TA .i or treoccurv-tior of d«Telopmer.t planning » WheLhor countries with -rowing populations ¿lect to concentrate on their agriculture 1 sectors to r.-áse íüí and expons, or vmethor they encourage industrialisation -.'ith it- corollary of "allions ;f .-ban rr.ouths to feed, the maintenance and expansion of 'igricultural reduction is cruci-.I , In several developing countries ever the pa üt half-decade, chronic food shortage- situations have occurred, attaining f • ~ ine or ne -ir- fami ne proportions. 2. This criais became especially acute -'.round n7_?. -.-hen years of adverse weather conditions impaired the production of coréala in developed food-exporting eountries as well as developing countries. Those do vol o pod countries which did hive surplus grain production found ready markets in other developed countries which had experienced poor harvest;-, and thr consequent limitation on international food-aid made the poorer and more populous developing court ri or, oven more dependent on their own declining food production capacitv, -. Unfortunately, the ^pidly increasing oil !<nd fertilizer or i oes -md a world shortage of fertilisers resulting fren previous reductions in invostrneat in fertilizer orojoots combined with somet irieti already .sovert- h; lan-e-of-ar yrnents deficits to so/er?l.v affe-+ the capacity of rrost deve] o ring countries of the ESCAF region to raise food production.. At a time whon food reserves were reduced to dangerous levels, the high prices and .short suoni y of fertilizer cloved progress on the "green revolution" by precluding even the maintenance of fertiliser importa to raise or maintain food production in subsequent yoars.
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