Analysts: Fertilizer prices to drop by summer

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Although fertilizer prices have remained high over the first quarter of 2012, analysts predict prices will stop increasing by summer and could decrease. This decrease would include prices for phosphate, nitrogen and potash. However, in the short term, prices are expected to move higher as the planting season begins.

Many of the large fertilizer manufacturers have reduced production in the first three months of 2012 to prevent lower prices, but analysts predict that supplies are likely to increase soon as several manufacturers have announced phosphate expansion plans for 2012 and beyond, which will increase global stocks.

Potash Investing News reported that David Asbridge, president and senior economist of NPK Fertilizer Advisory Services, said, that “[w]hen you have high prices, you tend to bring more production capacity on, and that’s what we’re seeing.”

It has been projected by industry consulting firm Global Industry Analysts Inc., that the global phosphate market could reach 73.9 million metric tons by 2017 with extraction peaking by 2030, according to Potash Investing News.

As a result, Asbridge projects that “[i]t’s a good possibility that 2013 [phosphate] prices could be even lower than they are now.”

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