Forecast for 2013 phosphate market

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With 2012 over, all eyes are now shifting to 2013 and how the new crop year will impact the phosphate market worldwide. Many of the factors that played a role at the end of 2012 will continue into the first quarter of 2013 as farmers are expected to plant a record amount of crops this year.

High commodity prices and high farm income is expected to give farmers the purchasing power they need to invest in more seed and crop inputs. Farmers are expected to make the investment to take advantage of the higher commodity prices currently in place.

With near record crops projected to be planted that will mean an increased need for fertilizers. Many of the fertilizer manufacturers have already stated near the end of 2012 that they anticipated strong demand for crop nutrients for the 2013 crops, despite manufacturing plant shutdowns expected sporadically throughout the first quarter of 2013.

Despite these optimistic outlooks, some factors could dampen demand and prices. If global economic growth is slow in 2013, the anticipated demand for agriculture and fertilizers could fizzle out.

“The Organization for Economic Co-operation and Development has projected that compared to 2012 levels, economic growth levels for 2013 will be flat for developed economies, with the United States and Germany slowing slightly,” reported Potash Investing News.

Global growth will continue to be driven by developing and emerging economies, and is forecast to grow 5.1 percent—up from 2012’s 4.6 percent—a United Nations global growth forecast projects.

Another factor that will impact phosphate markets is the shift in production countries. Morocco, which has already has 85 percent of the world’s phosphate reserves, plans to expand its presence in the industry. At the same time, Agrium plans to close its Kapuskasing phosphate rock mine in 2013, which will cause more phosphate rock to be imported from Morocco.

In addition, Saudi Arabia’s Ma’aden will also develop its significant resources, and in doing so will help shift Middle Eastern and North African resources to the center of global agricultural markets, Potash Investing News reported.

Unknowns that may still have an impact on the global phosphate industry include weather. Drought impacted crops in the United States, Brazil, Russia and Europe in 2012 and could still be a factor in 2013.

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