Stronger crop prices and volatile weather underline the need for growers to invest in fertiliser to protect their crop yields, notes Canadian fertiliser manufacturer Potash Corp.
Its July market overview for stakeholders points to recent crop price strengthening as weather reports downgrade potential yield in many areas. This is leading to crop buyers increasing their forward buying.
Global food production has increased at an average 2% per annum over the last 15 years, despite the political and economic volatility over that period, the company reports. This will support future demand for the three major plant nutrients – nitrogen, phosphate and potassium.
“Current fertiliser and crop price levels provide strong affordability and incentivise farmers to supply the necessary crop nutrients to achieve high yields,” PotashCorp states.
US to import less N
2017 has been a “transition year “for the nitrogen market. There has been significant recent investment in new nitrogen manufacturing capacity – 42% of it in the US – but once this comes on stream by the end of this year, the rate of new additions will slow. In fact, Potash Corp expects no further projects before 2020.
One important effect of the US investment in nitrogen manufacture will be a reduction in its import requirement as it becomes more self-sufficient in the nutrient.
The company said that potash prices have further strengthened in most global markets since the beginning of 2017, due to rising demand and lower stock levels. Research shows that potassium has a role to play in helping crops maintain yield in dry conditions, it said.
Potash trade up 5%
The company estimates global 2017 potash shipments will total some 61-64 million metric tonnes, up from the 61m tonnes traded in 2016.
World phosphate demand rose between mid Q1 and mid Q2, with Latin America and Asia expected to maintain the level into Q3. New phosphate capacity in Morocco and Saudi Arabia will help meet this demand – the company expects 2.2m tonnes of new phosphate capacity to come on stream in 2017.
PotashCorp is about to merge its interests with fellow Canadian agribusiness Agrium under the Nutrien logo.
(Source – http://www.agrimoney.com/news/stronger-crop-prices-support-global-fertiliser-demand-says-potashcorp–10893.html)