Why Do MAP Prices Continue to Resist the $352 Levels?
Monoammonium phosphate prices
In the week ending July 15, 2016, average MAP (monoammonium phosphate) prices in Brazil were unchanged at $352 per metric ton from the previous week. This week’s prices appear to be the bottom for MAP prices.
MAP is the second-most-used phosphate fertilizer after DAP (diammonium phosphate).
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In the week ending July 15, average MAP prices were lower than they were a year earlier. MAP prices averaged $352 per metric ton last week—27.4% lower than their average price of $485 per metric ton in the same week last year.
Unlike DAP prices, MAP prices are continuing to stabilize at their current levels. That’s a big positive for fertilizer producers who worry that more price declines could hurt their margins. Stable prices also funnel orders from customers who delay their purchases in anticipation of another price decrease.
Fertilizer companies and ETFs
Despite MAP prices falling over the past year, they seem to be recovering and staying above the low of $329 per metric ton that we saw in the second half of February 2016.
Mosaic (MOS), PotashCorp (POT), Israel Chemicals (ICL), and Agrium (AGU) produce phosphate fertilizers. They’re impacted by falling fertilizer prices. You could consider investing in the iShares Global Materials ETF (MXI). MXI invests about 3.7% of its portfolio in DuPont (DD) and ~3% in Monsanto (MON).
In the next part of this series, we’ll look at prices for potash fertilizers—the third key crop nutrient after nitrogen and phosphate.