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Fertilizer Prices for the Week Ended July 8: More Bad News?

PART:
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Part 7
Fertilizer Prices for the Week Ended July 8: More Bad News? PART 7 OF 8

MAP Prices Stabilized at $352 in the Week Ended July 8

Monoammonium phosphate prices

In the week ended July 8, 2016, average MAP prices in Brazil were unchanged at $352 per metric ton from the previous week. MAP appears to be resistant at the current price level.

MAP (monoammonium phosphate) is the second-most-used phosphate fertilizer after DAP (diammonium phosphate).

MAP Prices Stabilized at $352 in the Week Ended July 8

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Year-over-year prices

In the week ended July 8, average MAP prices were lower than they were a year earlier. MAP prices averaged $352 per metric ton last week, 27.8% lower than their average price of $488 per metric ton in the corresponding week last year.

Unlike DAP prices, MAP prices are continuing to stabilize at their current levels. That’s positive for fertilizer producers who worry that further price declines could hurt their margins. Stable prices also funnel orders from customers who delay their purchases in anticipation of a further price decrease.

The effect on 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 we saw in the second half of February 2016.

Mosaic (MOS), PotashCorp (POT), Israel Chemicals (ICL), and Agrium (AGU), which produce phosphate fertilizers, are affected by falling fertilizer prices. You could consider investing in the iShares Global Materials ETF (MXI), which 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.

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