RaboBank: ‘Demand Revival’ For Fertilizer

In its semi-annual global fertilizer outlook, Rabobank’s global farm inputs team says there has been a “demand revival” in the market. Prices have been lifted off ten-year lows—significantly supported by Brazil and India, which have been two of the top three importers of fertilizer in the past five years. In the U.S., an early harvest and increase in commodity prices in the fourth quarter led to bullish demand. 

However, the Rabobank team expects the pricing strength to tail off in the second quarter of 2021, when northern hemisphere purchases decline.  

“Once seasonal demand from the northern hemisphere subsides, markets will again be exposed to heavy supplies,” the report states. 

One segment of the market to watch is urea. Rabobank cites the International Fertilizer Association expecting a 4.5% production increase being mismatched with only a 1% forecasted increase in demand. 

The report also details how potash markets could sustain positive growth as the U.S. and Brazilian markets show continued demand. And of note, Belarus is the second largest exporter of potash, and is currently experiencing political turmoil, which if it escalates could bring about further increases in prices of potash globally. 

The full report gives details by geographic region and fertilizer segment. It’s available online here for RaboBank clients