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IFA issues short-term fertilizer outlook: P markets tightening?

December 28, 2010

The International Fertilizer Association released its latest short-term fertilizer outlook report after a meeting in New Delhi, India (link).   There are several items of note.  Demand for (and production of) various chemical fertilizers has rebounded very rapidly from the economic slowdown.  For example, fertilizer use increased by 7-13% over the first half of 2010 compared to 2009.  Increases of 3.5-5% are estimated for 2011.  The report also notes major industry responses to increase fertilizer production capacity in various countries; for P, these include new or re-opened capacities in China, Bangladesh, Brazil, Jordan, Morocco, Saudi Arabia and Tunisia.  Of particular interest was the evaluation of supply and demand differentials for various fertilizer components.  For N and K, future supply capacities seem to easily match expected demand.  However, for P, their analysis calls for a tightening (see graph).  The report does not speculate why P markets might be tightening, although from the graph it’s easy to see that projected production increases only marginally from 2009 to 2011 while supply increase by quite a bit.  Any ideas?  Likely a lag until expanded mine capacity comes online in African and Mideast production regions?

Current and project P supply and demand from IFA

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