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Strong Demand and Prices Bring Boom Time for Fertilizers: 4 Picks

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The fertilizer industry is on a solid footing buoyed by strong global demand and prices for crop nutrients. Strong agricultural market trends, a rally in crop commodity prices and attractive farm economics are spurring demand for fertilizers globally. Demand for fertilizers is also backed by the need to grow the production of grains to address rising consumption. A tight global supply-demand balance is also driving fertilizer prices.

Strong global demand coupled with supply constraints have provided a boost to crop commodity prices. Prices of corn and soybean have rallied to multi-year highs. Higher agricultural commodity prices augur well for crop nutrient demand. Expectations of higher planted corn and soybean acres globally this year on the back of higher crop prices also suggest an uptick in fertilizer demand. The U.S. Department of Agriculture estimates 92.7 million acres of corn planted in the United States for 2021, up 2% from last year. Soybean area planted is projected at 87.6 million acres, up 5% from 2020.

In the United States, healthy farm profits and higher planted acreage are expected to drive demand for fertilizers this year. Farm economics have strengthened in the United States on the back of a spike in crop commodity prices and government support. Solid farm income is likely to incentivize farmers to spend on crop nutrients. Robust grower economics back by strong crop demand are also expected to support demand in other major markets such as Brazil and India.

Meanwhile, phosphate markets are likely to remain robust in the near term on solid demand and pricing dynamics. Tight availability along with firm demand is driving up phosphate prices globally. Potash prices have also strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices and low global........

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