MUSCAT: Exports of gypsum from the Sultanate of Oman climbed 13.27% per cent to hit a new peak of 9.90 million tonnes in 2022, further consolidating the country’s global reputation as the world’s biggest supplier of the industrial mineral. This compares with exports of 8.74 million tonnes a year earlier in 2021. The 9.90 million tonnes represent nearly 50% of the total imported gypsum demand in the Indian subcontinent and Southeast Asian, Southeast African and GCC countries.
India retained its leading position as the top destination for Omani gypsum exports, lifting 4.84 million tonnes – representing an impressive 49% of the total Omani gypsum exports during 2022. It also accounted for 87.35% of India total imports of 5.54 million tonnes of gypsum for the year, the remaining 0.70 million tonnes (12.65%) coming from Iran, Bhutan and Thailand.
Over the last 15 years, Oman has been growing in stature as the dominant supplier of gypsum to a region encompassing the Indian subcontinent, Southeast Asian, Southeast African and GCC states. Between 2008 and 2022, historical gypsum importers of this region imported 238.98 million tonnes, recording a Compounded Annual Growth Rate (CAGR) of 6%. Omani exports accounted for 30.60% (73.14 million tonnes) of this total. The remaining 165.84 million tonnes were supplied by Thailand, Iran, Pakistan, Australia, Mexico and Bhutan.
Demand for gypsum - a key raw material for the cement and gypsum board manufacturing industries – projected to grow exponentially over the next 15 years, an industry expert told the Observer. “During the 2023 – 2037 period, demand in the region in question is expected to reach over 445 million tonnes with a CAGR of 5%,” he said.
Significantly, Oman’s stellar rise as a gypsum exporter came on the back of efforts by Asia’s past dominant gypsum exporter Thailand to cap its exports with the goal of conserving resources for their own significant domestic industries. Thai authorities have regulated the minimum FOB (Free on Board) export selling price, which presently averages US$20 per tonne.
Exports from Iran, another key player, also began to sharply decline due to US sanctions. Iranian exports to India, for example, slumped to 0.48 million tonnes in 2022, down from 1.99 million tonnes in 2021. Historically, Iranian exported around 10% of its annual production of gypsum primarily to India and other GCC countries, such as UAE and Qatar.
In the face of declining exports from traditional suppliers, Oman is now the unrivalled source of supply for a growing number of countries in the Indian subcontinent and Southeast Asia. The list includes Bangladesh, Vietnam, Indonesia, Japan, Philippines, and South/East Africa.
Of these countries, India remains the biggest consumer, by far. The Indian cement industry is the second largest cement producer in the world after China and accounts for more than 8% of the global installed capacity. Cement demand in India is expected to continue growing in the coming years, backed by the government’s push for infrastructure development and increasing demand in the housing sectors.
Since 2009, the gypsum supply deficit in the Indian domestic market has led to increased dependence on sizable imports of natural gypsum from Oman, among other countries like Iran and Thailand. Smaller volumes have been trucked by road from neighbouring Pakistan and Bhutan to industries in the northern parts of India.
Between 2009 and 2022, India imported 57.09 million tonnes of gypsum cumulatively at a CAGR of 16.60%. These imported volumes accounted for nearly 35% of the total gypsum consumed by the cement industry.
Based on the demand growth projections of the cement and gypsum board industries in India, gypsum demand is expected to reach nearly 380 million tonnes cumulatively by 2037 with a CAGR of 5.15%. Limited availability of domestic gypsum will lead to supply constraints and increased dependence on imports, necessitating imports of over 180 million tonnes gypsum to meet the domestic demand during this period.
India’s dwindling domestic gypsum resources is imperiling the growth of its cement industry. Phospho-gypsum production is limited with the bulk of existing phospho-gypsum stockpiles expected to be consumed by the road construction sector, per figures shared by the Indian Ministry of Road Transport and Highways. At the same time, production of FGD (Flue Gas Desulphurization) gypsum continues to be stymied by shortfalls in investments of US$13 billion necessary to build FGD plants.
In the light of the scenarios outlined above, Oman has emerged as the single most important supply source for gypsum. This dominant position, experts point out, should enable Oman to use its considerable leverage to control the gypsum export market and FOB prices in the region in question. With effect from January 2017, Oman has set an FOB floor price of US$ 12.50 per tonne of raw gypsum exported out of the country. This is in line with government-led efforts to support the growth of gypsum exports and boost non-oil export revenue, according to the expert.
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