How Mosaic’s Phosphate Prices Fared in 2Q16
Phosphate fertilizer prices are key to Mosaic’s (MOS) Phosphate segment’s sales, earnings, and stock price.
Dec. 4 2020, Updated 10:53 a.m. ET
Phosphate fertilizer: Realized prices
Phosphate fertilizer prices are key to Mosaic’s (MOS) Phosphate segment’s sales, earnings, and stock price. In the chemical fertilizers industry, prices are largely driven by industry supply and demand.
This impacts PotashCorp (POT). Mosaic, CF Industries Holdings (CF), PotashCorp, and Agrium (AGU) form about 14% of the VanEck Vectors Agribusiness ETF’s (MOO) portfolio.
Prices decline
DAP (diammonium phosphate) prices fell significantly in 2Q16, by 24% to $343 per metric ton, compared with $450 per metric ton in 2Q15. In comparison, the company’s guided price range was $335 to $355 per metric ton for the quarter.
Why prices declined and outlook
Prices declined due to continued macroeconomic issues, particularly due to imbalances caused by supply and demand. Mosaic’s management expects DAP prices for the coming quarter to be flat overall, on the back of expected stronger demand coming from emerging markets such as China and India. The company stated that retail prices for DAP In India are 15% higher due to global price declines and favorable subsidy programs in the country. In the next part, we’ll discuss raw material costs for the company and compare them with average market prices.
