Fertilizer Prices Up; Applications Seen Reduced – Rabobank
15 September 2014 Fertilizer prices are slowly rising from low prices witnessed earlier this year, driven by supply reductions, according to a new report from Rabobank Food & Agribusiness Research and Advisory group.
However, Rabobank believes that bearish commodity prices will have limited impact on input use in the short term, while the medium-term picture could see farmers reducing fertilizer applications as margins come under more pressure.
“Seasonal demand, mostly from China, India and the U.S., is unlikely to cause any prolonged rise in prices for the fertilizer complex, while risk averse sentiment in global commodities is leading to reluctance towards stock accumulation across the fertilizer chains,” the Netherlands-based financial services provider said.
In the U.S., congested barge and rail markets are driving increased fertilizer prices. In Brazil, comfortable stocks will limit the need for Brazil to import significant volumes this quarter. Rabobank expects Brazilian fertilzer demand to increase between 3% and 5% in 2014.
In China, “oversupply is still looming over the Chinese urea markets and is likely to provide bearish undertones to global prices when seasonal demand fades,” Rabobank said, while India will likely be the main driver of global urea demand in the coming months.
See the report here.
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