Phosphate and potash fertilizer market continues to improve

Mosaic, a US producer of phosphate and potash fertilizer, released a report on January 4, saying that its phosphorus and potash fertilizer performance increased significantly in the second quarter due to the favorable global agricultural environment. At the same time, it is expected that the market will continue to improve in the future, and the supply of phosphate and potash fertilizer is tight.

According to the report, the company's net income for the second quarter ended November 30 reached $1 billion; potash sales reached $699 million, an increase of 69% over the same period last year, compared with $414 million in the same period last year. Potash sales profit reached $285.2 million, accounting for 41% of sales, compared with only $179.9 million in the same period last year. Potash had revenue of $251.5 million, compared with $150.6 million a year earlier, while phosphate sales were $2 billion, up from $1.3 billion a year earlier. Mason said the increase in revenue was mainly due to an increase in sales prices and production. In 2010, the company sold 3.7 million tons of phosphate fertilizer, with an average selling price of $461 per ton for diammonium, 1.8 million tons for potash and $331 per ton for potassium chloride.

The report shows that the global agricultural economy was in a good situation last year, the market environment kept fertilizer demand strong, and producers' inventories hit a record low, laying the foundation for fertilizer sales. The prices of agricultural products such as grains, oilseeds, fruits and vegetables have all reached historically high levels, sending a clear signal to global growers that they should expand their acreage and use more new technologies and fertilizer products in 2011.

Huge demand will strain the supply of phosphate and potash, which will not be alleviated until the new capacity is put into production. Following heavy demand in North and South America during the fertiliser season, US producers reported only 488000 tons of diammonium and monoammonium stocks on November 30th, which have remained low. North American potash producers reported inventories of 1.6 million tonnes, half the level of last year and 20 per cent below the average of the previous three years.

Meisheng estimates that global phosphate fertilizer shipments will rise to 57 million tons in 2010 and 59 million to 61 million tons in 2011. Under the current good market situation, the demand for diammonium in India is expected to increase by 5% from 2010 to 2012. Other major chemical fertilizer markets, including North America, Europe and Oceania, as well as several countries in Asia, will greatly increase the output of agricultural products, leading to an increase in chemical fertilizer sales. Global potash shipments rose 59 per cent to 49.7 million tons in 2010 and will increase to 53 million-56 million tons in 2011. Demand for potash will increase in all major consumer and import markets, including the United States, Brazil, China, India and other Asian markets. Brazil's potash imports will grow to 6.5 million-7 million tons in 2011, while China will reach 6 million-6.5 million tons, and India's demand for potash will bring its imports to an all-time high of 6 million-6.5 million tons.

"the global grain market is constantly proving to growers that fertilizer input is the most effective measure to increase production," said Meisheng president and CEO.