Investor Relations

Global environment 2009

Global environment

2009 highlighted the relevance of Yara’s citizenship approach. As a truly global company, Yara was influenced by the financial crisis that stalled global growth. At the same time, attention was drawn to the close connection between food production and climate change, a factor maturing the market for Yara’s solutions.

Global trends

Together with the shaping issues identified in Yara’s citizenship approach, three major trends of paramount importance are exerting influence on Yara’s strategy execution: growth, globalization, and urbanization. Driving industry development and shaping market demand, these factors will influence the company as well as its customers in the decades to come.

Global growth – of economies and populations – generates increased demand for food, in turn driving the demand for Yara’s crop nutrition and agronomic solutions. Facilitating global trade and the transfer of capital and knowledge, globalization eases the operation of a global company. Continued urbanization contributes to the environmental challenges that support future demand for Yara’s environmental solutions. More stringent environmental regulations in several markets also create further demand for these solutions.

Global developments

Three major dimensions which affect Yara, as well as society at large, are global economic development, political development, and social development:

Economic development:

In 2009, global growth stalled following the recession that came in 2008, before easing towards the end of 2009 and into 2010. The recession also affected the agricultural sector, which was already suffering from low investment levels. In their joint “Agricultural Outlook 2009–2018” report, the Organisation for Economic Co-operation and Development (OECD) and the UN Food and Agriculture Organisation (FAO) concluded that the agriculture sector is showing more resilience to the global economic crisis than other industries “because food is a basic necessity”.

Political development:

In 2009, global warming and its anticipated effects on economy and society became a major policy issue, culminating with the UN Climate Change Conference (COP 15) in Copenhagen in December. The prominence of the climate change issue was emphasized by several high-level meetings and substantial reports during the year, including the World Bank’s “World Development Report 2010” devoted to the issue. Closely associated with climate change and food production is the question of water availability, also a political matter calling for international cooperation and coordination.

Social development

In 2009, global hunger reached record levels despite good harvests, largely ascribed to the combination of food and financial crises, and additionally to climate change effects. The global food crisis which came to global political attention in 2008, continued into 2009. Food prices came down from the record levels of 2008, but remained high. In its “State of Food Insecurity 2010”, the FAO and the World Food Programme (WFP) recorded that 1.02 billion people, about a 100 million more than the previous year, lived in hunger. Food prices have become increasingly linked to energy prices, and particularly oil prices.

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