MOP (muriate of potash) is the key potash fertilizer (SOIL) used globally. Similar to fertilizer prices that we’re covering in this series, MOP prices have fallen significantly over the years. PotashCorp (POT), the largest player in potash fertilizers by capacity, is set to merge with Agrium (AGU) this year.
The falling price trend for potash put pressure on existing companies to justify their expansion costs and maintain their margins. However, the trend appears to have changed in recent weeks. Let’s see how potash prices performed last week.
For the week ended January 13, 2017, the potash price movement was largely flat to positive at the locations in the above graph. In the US Corn Belt, average weekly granular potash prices were flat at $224.90 per metric ton.
Last week, standard MOP prices in Southeast Asia also remained flat at $243 per metric ton from the previous week. In contrast, average weekly prices in Brazil rose 1.7% to $241 per metric ton, from $237 per metric ton last week.
Positive moves in potash prices can explain the price movement in the stocks of potash producers such as Intrepid Potash (IPI) and Israel Chemicals (ICL). These stocks faced severe weaknesses in the market last year. Recent 3Q16 earnings suggest a positive outlook for fertilizer prices in 2017. On average, potash prices at the above locations fell 10.0% compared to the same week last year.
Next, let’s see how fertilizer affordability moved last week