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Rabobank Fertiliser Quarterly: Q1 2013

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The new Rabobank Fertiliser Quarterly indicates that the global fertiliser market has been impacted by reduced end-user demand and inventory destocking through Q4 2012.
This has resulted in a lull in global trading activity, which is expected to continue in Q1 2013. The Rabobank fertiliser industry report also states that global fertiliser prices are likely to remain relatively range-bound and market fundamentals suggest global fertiliser markets will remain relatively balanced through Q1 2013.
Potential downside price risk can be however expected from a general oversupply, especially across the phosphate and potash complex through Q1 2013. As a result, Rabobank has a slightly bearish view for the fertiliser complex through Q1 2013, with urea being an exception.
The lull in global trading activity in the fertiliser complex through Q4 2012 is being considered normal given the state of planting and harvest during this period. Subdued demand and lacklustre trading have kept most nutrient prices relatively range-bound throughout the period. Overall, price movements were mixed across the fertiliser complex, but market sentiment has generally been weaker.
Rabobank analyst, Dirk Jan Kennes observes that agricultural markets are faced with the challenge of rebuilding global stocks next season, and given the precariously balanced fundamentals, global agri commodity prices are expected to remain at elevated levels in 2013.
Buyers have remained cautious through the closing stages of 2012, that time of the year when end-user demand globally is seasonally low. Southern Hemisphere crops are underway, while the large Northern Hemisphere crops have been harvested, resulting in many market participants liquidating excess fertiliser inventories.
Global buyers will therefore, continue to defer purchases in the short term in anticipation of lower prices. In addition, as the euro crisis continues, European farmers are very cautious about locking in fertiliser purchases far in advance of the application season.
The complete report is available on the Rabobank website.

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