30 November 2011 19:53 [Source: ICIS news]
HOUSTON (ICIS)--The strength of agricultural fundamentals such as increased crop acres, high crop prices and farm profitability will drive the demand for fertilizers higher in 2012, Canadian fertilizer maker PotashCorp said on Tuesday.
"A robust need for agricultural production to keep pace with growing food consumption around the world will push fertilizer demand higher in 2012," said PotashCorp chief financial officer Wayne Brownlee at the Citi Basic Materials Symposium.
Corn economics, which are particularly favourable in the US, will continue in the coming year, Brownlee said, noting that the cost of fertilizer represented 13% of the cost to produce a bushel of corn in North America with the ration likely to increase to 15% in 2012.
PotashCorp forecasts that US farmers will plant 93m acres of corn in 2012, up from the 91.7m acres planted in 2011.
A further boost to fertilizer demand is the need in Brazil to replant much of its aging sugarcane crop, which will result in an increased consumption of potash.
Brownlee said that the consumption of potash in China is forecast by PotashCorp to increase from 10m tonnes/year in 2011 to about 20m tonnes/year over the next decade.
Total global demand for potash, which was 57m tonnes in 2011, should increase to 58m-60m tonnes in 2012.
PotashCorp expects potash pricing to move higher at a modest pace over the next several years as increasing production struggles to keep up with the demand for the fertilizer.
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