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Hesitant buyers, particularly in the US, have adopted conservative
purchasing behaviour, more akin to the post-crisis behaviour seen in 2009,
opting to buy on a hand-to-mouth basis. Fertilizers demand is expected to
return, but buyers are not likely to step back in strongly until February and
therefore prices will remain under pressure until then.
According to the International Fertilizer Industry Association (IFA),
forecasts for demand levels in 2012/2013 are highly speculative at present due
to the depressed economic context in many developed countries. However, global
agricultural commodity prices remain attractive, driven by a disappointing US
harvest and robust food, fuel and feed demand.
Consequently, global fertilizer demand is still expected to grow by
around 2.3% to 182.2m tonnes next year. But IFA notes there is a downside risk
as the economic downturn may impact fertilizer demand in the first half of
2012.
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