(Bloomberg) — Farmers may have to get used to high fertilizer prices as global stockpiles remain flat despite a sharp rally, according to one of the worlds largest suppliers.
Prices of crop nutrients such as phosphate and potash have surged since late last year amid tight supplies, strong demand and geopolitical uncertainties in key producing nations.
The extent of that recovery has exceeded expectations, said Mosaic Co. Senior Vice President Corrine Ricard. Prices probably will stay at elevated levels for longer than previously thought “because we don’t see inventories building up anywhere,” she said in an interview. Even in Brazil, where high crop prices and a weak currency have sent farm profits to record highs, pricey fertilizers may erode the coming season’s windfall.
“Farmers will start to see the affordability changing,” said Ricard, who heads Mosaic Fertilizantes, which operates in Brazil and Paraguay. “It will still be quite favorable for growers, although below 2020.”
Brazil, a major exporter of everything from soybeans to corn and coffee, accounts for a third of Mosaic’s sales. The company expects industry-wide demand in Brazil to total 43 million metric tons this year, up from 40.5 million in 2020. Soy and corn farmers have already locked in an estimated 85% of their nutrient needs.
“Brazil is the growth engine for the company,” she said. “The pace of demand in Brazil has been higher than expected — it has been phenomenal.”
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