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Phosphate Rock Prices Decline, Bringing Relief to Phosphate Producers

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Phosphate rock

Phosphate rock prices declined in the week ended April 29, 2016. Phosphate rock is one of the main input materials required for manufacturing phosphate fertilizers such as DAP (diammonium phosphate) and MAP (monoammonium phosphate).

It’s important for companies such as Mosaic (MOS), PotashCorp (POT), Israel Chemicals (ICL), and Agrium (AGU) to track phosphate rock prices. It takes between 1.6 metric tons and 1.7 metric tons of phosphate rock to produce a single metric ton of DAP, according to Mosaic.

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Prices unchanged

The average price of phosphate rock for the week ended April 29, 2016, declined to $111 per metric ton from the previous week’s $114 per metric ton. Phosphate rock’s price oscillated between a low of $93 per metric ton and a high of $128 per metric ton during the week.

Morocco is the largest producer of phosphate rock. According to the International Fertilizer Industry Association, Morocco’s share of global phosphate rock production was 49% in 2011.

Prices are still lower

Phosphate rock prices have fallen over the last year. In the corresponding week one year ago, the average phosphate rock price was $118 per metric ton. With downward pressure on phosphate fertilizer prices and concerns over phosphate’s price outlook, companies have recently curtailed production.

You can invest in Mosaic through the SPDR S&P North American Natural Resources ETF (NANR), which invests about 1.6% of its portfolio in Mosaic.

In the next and final part of this series, we’ll look at potash fertilizer prices, especially MOP (muriate of potash).

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