COVER
Demand forecasting for fertilizer marketing



Contents

Demand forecasting for fertilizer marketing

by
N.S. Parthasarathy

The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

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FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 1994
© FAO


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CONTENTS

1. Introduction

2. Reasons for Demand Forecasting

3. Terminologies

4. Factors Influencing Fertilizer Demand

5. Forecasting Methods

6. Assessment of Potential by "Input" and "Output" Methods

7. Time Series Analysis and Trend Extension

8. Growth Rate Method

9. Causal Model Method

10. Lead Indicators

11. Survey of Buyers' Intentions

12. Sales Force Opinion

13. Market Share Method

14. Use of Expert Judgement

15. Use of Sample Surveys

16. Selection of a Suitable Forecasting Method

17. Using Demand Forecasts at Company Level

18. Using Demand Forecasts at National Level

19. Some Precautions in the Preparation and Use of Forecasts

20. Timing of Demand Forecasts

21. Need for Data Bank

22. Concluding Observations

ANNEXES

I Specimen Working for Calculating Monthly Seasonal Index

II Survey of Buyers' Intention - Specimen Interview Form

III Composite of Sales Force Opinion - Forecast Format

IV Forecasting Methodologies - Screening Grid

V Uniform Base Data assumed for an imaginary situation for applying different methodologies in Annexes VI to XII

VI Flow Chart and Specimen Working - Output Approach to Assess Fertilizer Potential

VII Flow Chart and Specimen Working - Input Approach to Assess Fertilizer Potential

VIII Time Series Analysis and Trend Extension for Demand Forecasting

IX Flow Chart and Specimen Working - Growth Rate Method for Demand Forecasting

X Flow Chart and Specimen Working - Survey of Buyers' Intentions for Sales Forecasting

XI Flow Chart and Specimen Working - Composite of Sales Force Opinion

XII Flow Chart and Specimen Working - Market Share Method for Sales Forecasting

XIII Flow Chart - Parallel Assessment of Demand to Improve Accuracy

XIV Expert Judgement - Procedure

XV Grade Conversion

XVI How the Demand Estimate is used for preparing the Country's Supply Plan

XVII A Typical Time Schedule for Forecasting and Procurement

XVIII Basic Statistics Needed for Forecasting

PREFACE

Accurate forecasting of fertilizer demand is essential, both for companies producing, importing and marketing fertilizer and for governments in their efforts to monitor the development of agriculture. This publication sets out to meet the needs of private and public fertilizer companies and of ministries of agriculture and other relevant ministries. It identifies the main forecasting techniques available and provides advice on methods to be adopted which are practical within the context of the limited resources available in most developing countries.

This publication has been prepared by Mr. N.S. Parthasarathy. It has benefitted from the work of M. Tahir Saleem, Ian Tywford, Iffat Khawaja, Khaliq-ur-Rehman, L. Chiodo Juvé, R.C. Gupta, U. Gupta and A. Shepherd.