While global fertilizer use dropped 7% in 2022, Rabobank analysts estimate an increase in usage by 3% for 2023. On the pricing side, Rabobank forecasts a positive outlook for fertilizer purchasing through 2024.
“These figures align with our Affordability Index, which shows much better conditions for purchasing fertilizers than a year ago,” said Bruno Fonseca, Senior Analyst, Farm Inputs at Rabobank. “The index’s movements confirm our expectation of usage growth in 2023, with nitrogen growing 2%, phosphate 3.9%, and potash 5%.”
Samuel Taylor, senior analyst for farm inputs at Rabobank, says U.S. wholesale fertilizer prices are down 25% to 50% — with variances resulting from timing and product type. He says volume demand should improve for the U.S. market. However, the factor to watch is soybean acres in 2024 and MAP supply with a potential shortfall.
Specific to the impact from the Israel-Hamas war, Rabobank sees marginal effect on the fertilizer markets at this point. Per Rabobank research, Israel accounts for about 3% of phosphate exports and 8% of potash exports globally.
“Global fertilizer markets have sufficient availability and sufficient alternative suppliers of potash and phosphate products in case of logistical disruptions in Israel,” Fonseca said.
If the conflict causes delays and higher logistical costs by vessel operators feeling discouraged from approaching the Mediterranean port of Ashdod, exports could be disrupted and price spikes could follow.
The nitrogen market is being challenged because of lower demand from corn and wheat growers. Additionally, with winter approaching, European demand for natural gas carries more uncertainty and causes uncertainty for nitrogen fertilizer production costs.
Its analysts are also watching a compressed ammonia supply which might lead to price increases in the coming months.
Rabobank sees a positive outlook for the potash and phosphate, noting potash going through a period of ample supply, and phosphate market is on the rise with a return of MAP/DAP exports from China.
