Mosaic Co. said strong fertilizer demand will continue through year’s end and beyond, driven by agriculture, and leading to what Chief Executive Joc O’Rourke said would be “one of our strongest periods in more than a decade.”
“Grower economics in most global growing regions remain attractive as a result of strong crop demand, higher-priced but still affordable inputs, and favorable weather,” the company said Monday, adding that in three of the four major fertilizer markets–North America, Brazil and China–domestic crop prices continue to incentivize nutrient application to drive higher yields. “In the fourth country, India, a normal monsoon and good crop prices are incenting growers to maximize yields.”
“However, supply may be limited by importer economics, where margins are negative given the market prices, current subsidy and the government-set retail price,” Mosaic said, adding that India shipments are likely to remain constrained until the situation changes.
Even with recent lower shipments to India, the company said, global markets are expected to remain tight.
Phosphate producer and channel inventories remain well below normal levels, Mosaic said, and that it expects 2021 exports to end the year down from 2020 levels.
Recent industry restructuring, it said, is expected to further limit supplies available for export beyond 2021.
Mosaic said that about 90% of phosphate and potash segment sales expected to be realized in the third quarter are already priced.
Potash prices in the third quarter, it said, are expected to be $25 to $35 above second-quarter average realized prices.
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