Fertilizer stockpiles will need replenishing next year, boosting the demand outlook for the slumping crop nutrients industry, according to supplier Mosaic Co.
Global shipments of potash, a key crop nutrient, are expected to increase by 5 million metric tons next year to reach 70 million metric tons, Chief Executive Officer James O’Rourke said Wednesday during an earnings call. Such a volume would be the highest since at least 2021, prior to Russia’s invasion of Ukraine.
Supplies have remained constrained by sanctions on exports from key producer Belarus as well as logistical constraints amid dwindling inventories. Even so, nutrient prices have declined after a surge in the past two years prompted farmers to cut down on use, leaving distributors with a glut.
Excess inventories in agriculture powerhouse Brazil now have been fully worked through, paving the way for stronger sales and profits into 2024, according to Mosaic.
Farmers around the world are now seeking to replenish soil nutrients, leading to a rebound in demand for potash and phosphates when supplies are tight. The company’s shipments of potash and phosphate to meet demand from North American farmers during the spring planting season were the highest in five years, O’Rourke said.
“We are seeing strong consumption returning,” he said.
Shares of Mosaic, which on Tuesday reported third-quarter profit that trailed analysts’ expectations, rose as much as 5% on Wednesday on the outlook. The Tampa, Florida-based company is down 24% this year.
Author: Gerson Freitas Jr.
