Future use of urea in N.Z. farming scene

Press, 15 August 1980, Page 8

Future use of urea in N.Z. farming scene

The Petrochemical Corporation of New Zealand is optimistic about prospects for export of urea to the Asian/Pacific region. In New Zealand it believes that the product needs to be used wisely and in accordance with best farm management principles.

World-wide consumption of nitrogen increased by 18.5 million tonnes of nitrogen content from 1969 to 1977 and is expected to increase by a further 21.5 million tonnes by 1985, according to Mr lan Menzies, marketing manager of the Petrochemical Corporation of New Zealand, in a recent paper. Urea is the market leader among fertiliser products and by 1985 is expected to have the greatest share of the world fertiliser market The consumption of nitrogen fertilisers in New Zealand has traditionally been low by world standards in contrast with the use of' phosphatic fertilisers. The trend in usage of nitrogen. fertisilers in New Zealand, however, has lately followed overseas experience, increasing by 12,000 tonnes of nitrogen content, or 103 per cent, from 1969 to 1977, and is predicted to increase by a further 24,000 tonnes of nitrogen content by 1985. Mr Menzies stresses that Petrochem is well aware of the special conditions applying to New Zealand farming and believes that urea has to be used wisely and in accordance with the. best farm management principles. His company would work closely with soil scientists, farm advisers and similar interests to ensure that its use was beneficial and not detrimental to pasture management.Agriculture in New Zealand was predominantly pastoral and the use of fertiliser nitrogen on pastures had traditionally been low. This was because of the dependence on fixation of biological nitrogen in soils through clovers. In spite of the large inputs of nitrogen from legumes, evidence from nitrogen fertiliser trials indicated that well man-* aged grass-clover pastures were subject to continual nitrogen stress. Reports of nitrogen responses in farming situations involving permanent pastures had shown that tactical nitrogen fertiliser applications in late winter/ early spring could overcome seasonal limitations of feed supply in dairy, beef and sheep systems. Nitrogen responses varied with season and weather and the tactical role for

nitrogen fertiliser in intensive grassland farming was one of single applications timed to increase immediate pasture production, thus helping to overcome a foreseeable deficit in feed supplies. Nitrogen fertilisers, it had been found, might be useful on hill country where additional animals could be carried by providing nitrogen-boosted pasture for a limited period over the winter/spring months. There was an increasing awareness on the part of ■ fanners of the more advanced approaches to raising stock numbers and production. Tactical use of nitrogen could play an important role in this. It was suggested that availability, price and economic return were the factors which had in-

fluenced fanners’ decisions to buy nitrogen products in the past. These factors would continue to influence buying decisions but changes in the relationship of these factors to farming were foreseen. For example, once production began at Kapuni, local availability of urea should eliminate the uncertainty of supply which was sometimes evident in the past. Then again, prices of nitrogen products had been generally higher per unit of nutrient than prices of phosphatic or potassic fertiliser in the past. This situation was changing as phosphatic fertiliser prices increased and fertiliser subsidies were reduced. As the management of nitrogen fertiliser application became better understood, so did the value of applying nitrogen, particularly for those farmers who were farming to a higher level of production. In the longer term, Government, agricultural .and economic policies combined with market forces would appear likely to provide sufficient incentive for farmers to raise their production. The ready availability of locally-produced urea fertiliser should help farm management and increase nitrogen use in New Zealand primary production. Petrochem’s marketing philosophy would be oriented toward the needs of the customer. It was intended to adopt a responsible approach to the promotion of nitrogen usage, in the belief that it should be used wisely and managed well. Better techniques of application and management would be promoted to improve utilisation and efficiency of production. Tactical use of nitrogen on pastures would be encouraged to help farmers gain vital out-of-season growth when feed supplies were critical. Recent changes in the balances between supply and demand projected for the 1980 s indicated a much stronger market for nitrogen products, particularly in the Asian/Pacific region. Against this background, Petrochem had already entered into discussion with a number of very substantial overseas trading organisations with great experience, financial resources and expertise in international trading. All these companies had expressed a strong interest, to the extent that they were prepared to make a firm commitment to a long-term contract for a guaranteed export tonnage. The high level of interest in handling export sales was also supported by an upward trend in international trading prices for urea fertilisers. The Asian/Pacific region showed one of the fastest rates of growth in the consumption of nitrogen fertilisers and was projected to increase its consumption by 65 per cent from 1977 to 1985, The total Asian region currently produced 20’ per cent of the world’s nitrogen and was projected to produce 25 per cent of the

world’s nitrogen by 1985. In spite of this, total nitrogen consumption in the Asian region would still be ahead of production.

In this situation New Zealand was well placed to supply growing local export markets, which were within easy reach. Petrochem would: be in a position to export, at favourable, prices because of its competitive, cost of production, based on the advantageous economic cost .of natural gas. It would also be close enough to markets in near neighbour countries which would continue to need to import nitrogen fertilisers. Further discussions would be held in the near future with the aim of negotiating firm export agreements. Petrochem was confident these negotiations would produce a result that was favourable to New Zealand and the success of the project;

P e t r o che m'* s ammonia/urea manufacturing complex will have a capacity of 272 tonnes per day of ammonia in the first plant using natural gas as a feedstock and 470 tonnes per day of urea in the second plant using the ammonia produced in the first plant as the feedstock for the urea plant. The annual capacity of the urea plant will be 155,100 tonnes, ■ equivalent to 71,300 tonnes of.nitrogen.

The urea plant was designed specially for the complex by Toyo Engineering Corporation of Japan and the ammonia section was intended for a plant in the United States and.was only partially designed. and fabricated when the order was cancelled. This section was re-designed for the Taranaki plant. to incorporate the best modern technology. The plant is claimed to have a substantial production cost advantage over plants currently being built in Asian countries.