November 2021 - Market Update
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November 2021 – Market Update
Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about proposed or pending future transactions or strategic plans and other statements about future financial and operating results. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: the economic impact and operating impacts of the coronavirus (Covid-19) pandemic, the potential drop in oil demand/production and its impact on the availability and price of sulfur, political and economic instability and changes in government policies in Brazil and other countries in which we have operations; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates, including the performance of the Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the timely development and commencement of operations of production facilities in the Kingdom of Saudi Arabia, and the future success of current plans for MWSPC and any future changes in those plans; difficulties with realization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes in environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic’s operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadian resources taxes and royalties, or the costs of the MWSPC; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s potash mines; other accidents and disruptions involving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.
Rapid run-up of fertilizer prices has pushed affordability
index up despite crop prices remaining generally elevated
2018=100 Commodity Prices Plant Nutrient Affordability
Indexed Daily Close of Front Month Contract Plant Nutrient Price Index / Crop Price Index
250 1.30
Corn Soy Wheat Palm Oil Affordability Metric Average 2010-present
1.20
225
Less Affordable
1.10
200
1.00
175 0.90
150 0.80
0.70
125
0.60
100
0.50 More Affordable
Source: CME; MDEX Sources: Weekly Price Publications, CME, USDA, AAPFCO, Mosaic
75 0.40
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Commodity Current Price YTD Y-o-Y As fertilizer prices have continued to rise, the affordability
index is climbing to the levels seen in 2008/09. However,
Corn $5.63/bu +16% +40%
demand continues to be robust and unlike in 2008 global
Soybean $12.34/bu -6% +17% channel inventories continue to be thin. Also important to
Wheat (HRW) $7.90/bu +32% +45% note is that P&K prices remain well below the peaks of 2008.
Palm Oil MYR 5,310/t +34% +63%
Data through October 28, 2021
Data through October 28, 2021 3Phosphate: Supply disruptions have accelerated
pricing momentum in 2021; still well below 2008 peak
$ per tonne Global DAP/MAP Benchmark Prices
Published Spot Prices
1,400
DAP, NOLA DAP, India MAP, NOLA MAP, Brazil
1,200
Phosphate prices in 2021:
1,000
• NOLA DAP + $312/ tonne
• NOLA MAP + $355 / tonne
800 • Brazil MAP + $385 / tonne
• India DAP + $408 / tonne
600
400
200
Sources: Argus; Green Markets, Fertecon, ICIS
0
Jan '07 Jan '09 Jan '11 Jan '13 Jan '15 Jan '17 Jan '19 Jan '21
*weekly average reported spot pricing for prompt delivery
Data through October 28, 2021
4Phosphate: Industry margins moved higher in Q3
$ per Tonne
High-Analysis Phosphate Global Net Price
Calculated from Published Weekly Spot Prices
500
• Phosphate industry margins –
450
using the global net price as a
proxy – continued to move higher in
400 Q3 on strong fertilizer pricing and
broadly flat raw material pricing.
350
300
250
200
Source: Argus, Mosaic
150
Jan '07 Jan '09 Jan '11 Jan '13 Jan '15 Jan '17 Jan '19 Jan '21
Data through October 28, 2021
Global net price averages several global price benchmarks for finished phosphates and raw materials. It does not include any
handling, storage, transportation or conversion costs. 5Sulphur prices moderated but ammonia prices moved
higher on rising gas prices and tight nitrogen supply
Ammonia Weekly Raw Materials Prices Sulphur $/MMBtu European Natural Gas Futures Prices
$/MT c&f Tampa $/LT Dutch TTF
1000 250 45
Ammonia Sulphur 40
800 200 35
30
600 150
25
20
400 100
15
200 50 10
5
Source: Argus Source: NYMEX
0 0 0
Jan '07 Jan '09 Jan '11 Jan '13 Jan '15 Jan '17 Jan '19 Jan '21 Jan '20 Apr '20 Jul '20 Oct '20 Jan '21 Apr '21 Jul '21 Oct '21
• Sulphur price (Q3) settled down $12/LT q-o-q, but is • Recent hike in European gas prices prompted several
up $114/LT y-o-y. regional nitrogen producers to stop/curtail production in
• Tampa ammonia settled at $825/MT for November, up September/October.
$590/MT y-o-y and up $160/MT from October. • Strong demand combined with reduced supply is fueling a
further increase in global nitrogen prices in Q4.
• This supply/cost push is expected to feature
through Q1 2022.
Data through October 28, 2021
Data through October 28, 2021 6U.S. drilling activity has thus far been slow to
respond to higher prices
$/MMBtu
Henry Hub Natural Gas U.S. Gas and Oil Rig Counts
Daily Close of Front Month Contract (Baker Hughes)
7.0 1000
Source: The American Gas & Oil Reporter
900
6.0 Oil Rigs
800
Gas Rigs
5.0 700
4.0 600
500
3.0
400
2.0 300
200
1.0
100
Source: NYMEX
0.0 0
Jan '18 Jul '18 Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21 Jan '18 Jul '18 Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21
• Drilling activity, particularly for gas, has been slow to ramp up despite sharply higher prices since July 2020, as
oil/gas producers appear to have shifted their focus from growth to margin.
• We expect the current energy spike to correct lower post winter, which should in turn bring about greater
ammonia supply and lower pricing.
Data through October 28, 2021
72021 Q1-Q3 Regional Phosphate Roundup
U.S. Q1-Q3 Imports China Q1-Q3 Exports
Mil Tonnes DAP/MAP/NPS/TSP Mil Tonnes DAP/MAP/TSP
4.0 12 China had another
10.0
3.2 U.S. imports from 10 record quarter for
3.0 7.9 phosphate exports in Q3
2.4 offshore sources 8 6.9
remained elevated as producers tried to
2.0 1.6 6
through Q3. Total beat more stringent
4 government export
1.0 imports rebounded
102% or over 1.6mmt 2 restrictions. Total YTD
0.0 y-o-y. 0 exports were up 46% or
2019 2020 2021 2019 2020 2021 almost 3.2mmt y-o-y
India Q1-Q3 Imports Brazil Q1-Q3 Imports
Mil Tonnes DAP DAP import arrivals Mil Tonnes DAP/MAP/NPS/TSP
6.0 dropped toU.S. phosphate fertilizer imports remained elevated
through Q3
Mil Tonnes U.S. Offshore Phosphate Imports
(DAP/MAP/NPS/TSP)
1.4
• Strong demand in the U.S.
Other attracted products from a
1.2
more diversified supply
Tunisia base.
1.0
Jordan • Imports through September
0.8 were more than double the
Mexico same period a year ago.
0.6 Saudi • Heavy vessel lineup extends
into October (at least).
Israel
0.4
• Our estimates of channel
Russia+Lithuania inventories continue to point
0.2
towards below average
Morocco
levels, as domestic demand
0.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
clearly shifted higher.
2020 2021
Source: Genscape; market publications, Mosaic
• Includes volumes from Morocco for bonded shipment to Canada via the U.S.
• Other origins include Australia, Bulgaria, Egypt, Lebanon, Senegal, Turkey.
9Global Phosphate Demand
Global Phosphate Shipments YoY Changes of Phosphate Shipments
Mil Tonnes
DAP/MAP/NPS/TSP (Mil Tonnes DAP/MAP/NPs/TSP)
80 4.5
75 - 78
3.5 China
75 0.2
2.5
1.5 India
70 1.5
0.8
1.2 Other Asia
0.5 0.6
65 -0.4
-0.5 -0.1 Brazil
-2.3
60 -1.5
Other L Amer
-2.5
55 -1.5 Europe+FSU
-3.5
50 -4.5 North America
10 11 12 13 14 15 16 17 18 19 20 21E 22F 2021E 2022F
* NPS products included in this analysis are those with a combined N and P 2O5 nutrient content of 45 units or greater.
• We revised our forecast of global phosphate shipments to less than 76mmt in 2021, primarily on meaningful
downward revisions to our forecasts for China and India (which sets the stage for a lift from pent-up demand in 2022).
• Our preliminary forecast for 2022 calls for flat to moderately higher shipments to a range of 75-78mmt, as a recovery
of shipments in China and India is partially offset by flat to slightly lower shipments in some other geographies (with
demand expected to be curbed in places due to current higher pricing levels that we expect to persist).
• It is important to note that there remains considerable upside to our base case. 10Global Phosphate Shipment Forecasts by Region
November 2021
DAP/MAP/NPS*/TSP Low High Source: IFA, CRU and Mosaic
2020 2021E Comments (regional figures may not sum to total due to rounding)
Mil Tonnes 2022F 2022F
We expect domestic phosphate shipments to be reduced 8% in 2021 despite strong ag fundamentals throughout most of the year, as robust
export markets limited domestic availability and higher prices resulted in some cautious fill buying. Even with export restrictions taking affect in
Q4 and the need for inventory building, a slowed pace in production will likely limit shipment growth to close out the year. While production is up
China 18.8 17.3 18.0 18.5 12% over last year’s COVID-impacted levels (through September), we expect the pace to slow due to power/coal consumption restrictions and
resulting energy and ammonia availability and price. The reduction in 2021 shipments, however, is expected to lead to pent-up demand that
should boost 2022 shipments.
India phosphate shipments are forecast to drop a dramatic 20% in 2021 due largely to limited supplies (as farmer demand has been relatively
robust). DAP imports are down 42% y-o-y (through September) as India’s MRP and subsidy levels have made it the lowest netback market and
have kept importer economics and domestic production in the red (production is down 18% y-o-y). This has led to a significant decline in stocks
India 11.5 9.2 9.7 10.2 (down 69% y-o-y) and notable pent-up demand that should result in higher 2022 shipments, though we are currently taking a rather cautious
stance on a rebound. The extent of the forecast increase in ‘22 shipments will be heavily dependent on further adjustments to subsidy levels, as
recent ones have thus far not been sufficient, while global prices are expected to remain at current elevated levels through at least H1 2022.
Favorable weather patterns in the region and strong farmer economics have supported demand growth this year, and trade data shows multiple
importing nations (Thailand, Indonesia, Malaysia, etc.) in the region registering double-digit import growth y-o-y through September. We have
Other Asia/Oceania 10.1 10.3 10.0 10.3 assumed a modest Q4 slowdown in total regional imports from the strong YTD pace, believing that prevailing prices may cause some deferral into
2022. Affordability is expected to curb demand only slightly in 2022, as grower economics remain solid for many regional crops.
We project 2021 phosphate shipments in Brazil to surge to just over 11mmt. Phosphate imports were up a whopping 28.5% y-o-y through Q3 due
to strong demand and lower domestic production. This growth is expected to continue in Q4, but the current price environment is expected to slow
Brazil 9.6 11.1 10.8 11.2 the pace of growth. As we look to 2022, farm economics are expected to remain decent (though not as strong as seen in recent years), and as
such, fertilizer shipments in 2022 are expected to be flat to lower.
Strong ag commodity prices and high planted acreage drove on-farm demand sharply higher in Spring ‘21 and current fertilizer prices have yet to
North America 9.6 10.8 10.2 10.6 meaningfully impact Fall demand. As such, we expect 2021 shipments to come in near 10.8 mmt (the highest year on record). However, as
fertilizer prices and other input costs remain elevated going into 2022, there is the potential for shipments to pull back modestly.
The expectation of typical Fall demand in Europe coupled with steady expansion in the FSU have supported marginal y-o-y growth in the region.
Rapid increases of fertilizer prices may lead to some cautious Q4 buying in Europe (though not seen as yet), offsetting some of the strong pace
Europe and FSU 7.1 7.3 7.1 7.5 seen earlier this year, while Russian shipment growth seems more secure given steps taken to ensure supply and stabilize prices. Looking forward
to 2022, we expect generally flat shipments.
We expect demand to post slight gains in 2021 on the back of solid ag fundamentals globally. For 2022, we expect demand to be trimmed due to
Other 9.4 9.7 9.2 9.7 affordability concerns, particularly in Africa, while shipments to Latin America (ex-Brazil) and the Middle East should be more resilient.
Due to the sizable downward revisions made to our China and India 2021 shipment forecasts, total global shipments are now expected to remain
relatively flat vs. 2020. A few production setbacks and rising fertilizer prices have slowed shipments in the latter half of the year, along with India
Total 76.0 75.6 75.0 78.0 MRP and subsidy levels curbing their ability to import. Despite this downward revision in shipments, channel inventories remain tight, which
bodes well for shipment expectations in 2022, even at current elevated pricing levels. Our initial view of global 2022 shipments is in the range 75-
78 mmt, with a point estimate in the middle of the range at 76.4mmt representing 1.1% y-o-y growth.
* NPS products included in this analysis are NP and NPS products with a combined N and P 2O5 nutrient content of 45 units or greater. 112021E and 2022F Major Phosphate Market
Demand Summary
North America China
Mil Tonnes DAP/MAP/NPS/TSP Mil Tonnes DAP/MAP/NPS/TSP
China’s phosphate
Total North America shipments this year are
11 20
10.2 – 10.6 shipments are expected 18.0 – 18.5 estimated to decline y-o-y
10.8
to moderate from the 18.8 with a subdued H2. We
10 record-high level seen 18
expect domestic shipments
in 2021 (this assumes 17.3 to recover in 2022 on solid
9.6
9 no meaningful 16 farmer economics and some
restocking of channel help from the government to
8
inventories). 14 keep products in the
20 21E 22F 20 21E 22F country.
India Low DAP supply likely Brazil
Mil Tonnes DAP/MAP/NPS/TSP Mil Tonnes DAP/MAP/NPS/TSP
will drag total India After 2 consecutive years of
12 12
shipments down by 10.8 – 11.2 double-digit growth, we
11.5 9.7 – 10.2 ~2mmt this year. 11
forecast Brazilian
10
Extremely low in-country
11.1 shipments to stay flat or
inventories may force the 10 retreat slightly in 2022 due
9.2
8 government to consider to tempered, though still
9.6
9 positive, grower economics.
higher subsidy to secure
6 supply to meet strong 8
20 21E 22F farmer appetite for DAP. 20 21E 22F
12
Source: CRU and MosaicPhosphate S/D: Relatively balanced market suggests stable /
elevated 2022 pricing; China+India are the key swing factors
Phosphate Supply / Demand Forecast
(Incremental Y-o-Y Change)
Mil Tonnes DAP/MAP/NPS/TSP 2020E 2021F 2022F Comments
Projected Shipment Changes 3.94 -0.44 0.83 Flat to lower shipments in multiple geographies in 2022 is more than offset by
Percent Change 5.5% -0.6% 1.1% moderate demand recovery in China and India.
Potential Supply Changes 0.29 -0.19 1.12
Lower exports in Q4 '20 and Q1 '21 due to export restrictions; rebound in domestic
Base Case China Export Change -0.69 1.38 -1.84
demand in '21 and continued production switch away to PPA-based products.
OCP Ramp-ups and Debottlenecking 1.50 0.05 0.68 Line F commissioning delayed: Assume end-'21 and full capacity end-'22.
MWSPC Ramp-Up -0.11 0.34 0.40 Production recovers after setback in 2020; full capacity in 2022.
GCT M'dilla Commissioning / Ramp-up 0.00 0.09 0.09 Reports of higher downstream output this year, but labor unrest remains an issue.
Turkey/Egypt Greenfields 0.27 0.11 0.07 We assume both projects achieve full utilization in 2021.
Russian Expansions 0.00 0.15 0.15 Incremental volumes from PhosAgro Volkhov.
Other FSU Expansions 0.00 0.00 0.09 Kazphosphate 480kt P2O5 expansion included in Q4 '22 after significant delays.
Other Ramp-Ups / Closures -0.13 0.00 0.00 Includes Eurochem Salitre project in 2023.
Primarily COVID-19 Curtailments in '20; Misc outages and op. rate changes in '21 -
Misc. Known Operational Changes -0.55 -2.30 1.50
e.g. in U.S. (MOS and Itafos), India, Brazil and S. Africa.; Rebounds forecast in 2022.
S/D Surplus (+) / Deficit (-) -3.65 0.26 0.29
Source: Mosaic
The 2021 “surplus” depicted above is driven by a small Note that the small “surplus” in 2022 could easily be dwarfed
producer inventory build in China in Q4 2021 after by a larger shipment recovery in China/India, and in any event
shortfalls to domestic demand and export restrictions. does little to rebuild very depleted channel inventories globally
(remember the huge drawdown implied in 2020). 13Phosphate: DAP inventory in India has dropped to
dangerously low levels – expect an import rebound
Mil Tonnes India DAP Inventory Mil Tonnes China DAP/MAP Producers Inventory
7.0 3.5
Thousands
Trade Company MAP DAP
6.0 3.0
5.0 2.5
4.0 2.0
3.0 1.5
2.0 1.0
1.0 0.5
0.0 0.0
Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21
Channel Inventory: India inventory figures provide a stark Producer Inventory: China producers inventory figures
example of supply tightness: remain subdued:
• Total inventories in late-October are 3.1mmt or 69% • Inventory as of the end of August of 1.15mmt were 28%
lower y-o-y. or 0.75mmt lower y-o-y.
• Expect these to recover modestly in Q4 due to the export
restrictions imposed (though we do not expect these to
be burdensome as domestic demand rebounds in
2022 and domestic production faces headwinds).
Source: India Department of Fertilizer and CPFIA
14Brazil Phosphates
Mil Tonnes Brazil Phosphate Imports Mil Tonnes Brazil Phosphate Imports
(DAP/MAP/TSP/NPS)
4.0 12
2021 Q1-Q3 9.5 – 10.0
3.5
28% or 10
3.0 1.7mmt y-o-y 2020 4% or
43 kt y-o-y 8
2.5
2.0 6
1.5
4
1.0
2
0.5
0.0 0
Q1 Q2 Q3 Q4 10 11 12 13 14 15 16 17 18 19 20 21E 22F
2019=6.8mmt 2020=8mmt 2021=10mmt DAP TSP MAP/NPS Forecast Range
• The Brazilian fertilizer market is forecast to grow to a record of ~44mmt in 2021. Total Brazilian phosphate imports likely will top
~10.0mmt in 2021.
• Our 2022 expectations have been tempered, as the rapid surge of fertilizer (and other) costs constrains farmer economics.
Domestic production is also likely to rebound (down ~500kt in 2021) and reduce import demand in 2022.
Source: ANDA, Siacesp, Mosaic
15India DAP
Mil Tonnes India DAP Imports Mil Tonnes India DAP Imports
3.0 8.0
2021 Q1-Q3
2.5 42% or 7.0
2.0mmt y-o-y
2.0 6.0
4.8 – 5.3
1.5 5.0
1.0 4.0
0.5 3.0
0.0 2.0
Q1 Q2 Q3 Q4 10 11 12 13 14 15 16 17 18 19 20 21E 22F
2019=5.6mmt 2020=6.3mmt 2021=4.8mmt Actual/Estimate Forecast Range
• DAP imports were down more than 2.0mmt during the first three quarters of the year. We expect import arrivals to rebound to
~2.0mmt in Q4 based on heavy lineups in October and high shipment expectations in November.
• Together with the ~700kt decline in DAP fabrication, total shipments are likely to be down by ~2.0mmt this year.
• We expect DAP imports to rebound in 2022 to meet strong demand, though a more workable (for importers and producers)
subsidy regime is necessary.
Source: FAI, India Department of Fertilizer, Mosaic 16The incentive to produce more DAP is low due to
elevated raw material prices / insufficient subsidy
Mil Tonnes India DAP Production $ per tonne Producer Margin for DAP vs NPKs
0.6 100
Thousands
Min/Max Range (16-20) 2021 2020
44
0.5 50
0
0.4
-2
-50
0.3 -39 -46
-100
-88 -98
0.2
-150 -131 -130
0.1
-200
20:20:0:13 10:26:26 12:32:16 DAP
0.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Acid prices $1,160 $1,330
India DAP Production • Q4 phosacid contract at $1,330/t P2O5 (+$170 from Q3)
January-September 2021 vs. 2020
and DAP purchase at $780/t CFR continued to suggest
1,000 Tonnes 2017 2018 2019 2020 2021 Change Pct Chg
DAP 3,643 2,737 3,472 3,023 2,472 -551 -18.2% that the government needs to further increase subsidy
Annual Total 4,826 3,552 4,752 4,120 - in order to provide the economic incentive to
significantly boost DAP supply.
17China Phosphates
Mil Tonnes China Phosphate Exports Mil Tonnes China Phosphate Exports
5.0 12
2021 Q1-Q3
10 8.8 – 9.4
4.0 46% or
3.16mmt y-o-y
8
3.0
6
2.0
4
1.0 2
0.0 0
Q1 Q2 Q3 Q4 10 11 12 13 14 15 16 17 18 19 20 21E 22F
2019=10.1mmt 2020=9.3mmt 2021=10.7mmt TSP MAP DAP Forecast Range
• Phosphate exports exceeded earlier expectations in Q3 and came in at over 4.0mmt for the quarter. Export CIQ controls
became effective on Oct 15th, and we expect phosphate exports to drop in Q4.
• Furthermore, strict energy consumption control could weigh on phosphate production in Q4 (potentially 700-800kt reduction).
• Our base case assumes export restrictions to last through Q1 (exports down to ~500kt). In conjunction with lower production
(switching to industrial markets) and a recovery of domestic shipments (to around 3-year averages), we forecast China
exports to range 8.8-9.4mmt in 2022.
Source: China Customs and Mosaic
18Phosphate Outlook
Global Phosphate Shipments
Mil Tonnes Utilization
DAP/MAP/NPS/TSP
85 100%
80 95%
75 90%
• We expect industry operating rates to
70 85% hold relatively stable around the
current historically-elevated rates
65 80%
unless additional new projects are
60 75%
announced/commissioned later in the
forecast period.
55 70%
~2.2% CAGR ~1.7% CAGR
50 65%
10 11 12 13 14 15 16 17 18 19 20 21E 22F 23F 24F 25F
Actual/Estimates Mosaic Forecast Ranges
CRU - July 2021 Capacity Utilization
Source: IFA, CRU and Mosaic
* NPS products included in this analysis are those with a combined N and P 2O5 nutrient content of 45 units or greater.
19Potash: Prices continued their upward trajectory on
tight market conditions in Q3
$ per tonne Published MOP Prices
1,100
Source: Argus; Green Markets
1,000
• Cornbelt prices are up over
900 $446/MT since January 2021.
800 • The tight market situation in
Brazil pushed prices to near
700 $800/MT at the end of October.
600 • Prices in SE Asia rose rapidly in
Q3 to circa $600/MT.
500
400
Potash prices in 2021:
300
• SE Asia + $350/ tonne
200 • Cornbelt + $446 / tonne
Jan '07 Jan '09 Jan '11 Jan '13 Jan '15 Jan '17 Jan '19 Jan '21 • Brazil + $548 / tonne
c&f SE Asia delivered Corn Belt c&f Brazil
*weekly average reported spot pricing for prompt delivery
Data October 28, 2021
202021 Q1-Q3 Regional Potash Roundup
U.S. Q1-Q3 Imports China Q1-Q3 Imports
Mil Tonnes KCl (offshore) Mil Tonnes KCl
2.5 10.0
2.1 China gross MOP
Steady vessel lineups 7.8
2.0 8.0 6.8 imports remained at
kept U.S. offshore 6.1
1.5 1.4 6.0
relatively low levels in
1.2 imports at elevated
Q3 and that brought
1.0 levels in Q3. Total 4.0 total arrivals to almost
imports jumped 85% or
0.5 2.0 6.1mmt, down 11% or
980kt from a year ago
740kt y-o-y from last
0.0 on very strong demand. 0.0
2019 2020 2021 2019 2020 2021 year’s already low level.
India Q1-Q3 Imports Brazil Q1-Q3 Imports
Mil Tonnes KCl Mil Tonnes KCl
4.0 3.6 Indian imports were 10.0 9.1
3.3 Brazilian MOP imports
down 32% or 1.16mmt 8.0 8.0
3.0 8.0 peaked in July but
2.5 y-o-y, as rising prices remained at over
internationally have 6.0
2.0 ~1.1mmt a month.
made India amongst 4.0 Imports Jan-Sep
1.0 the lowest netback exceeded 9mmt and
2.0
markets globally. were up 13% or
0.0 0.0
2019 2020 2021
~1.0mmt y-o-y.
2019 2020 2021
Source: Genscape, China Customs, Siaesp, TDM, Mosaic
21Indonesia and Malaysia MOP imports rebounded to
more healthy levels on strong CPO prices this year
Mil Tonnes Indonesia + Malaysia MOP Imports Ringgits/MT Malaysian Palm Oil
(cumulative) Daily Close of Front Month Contract
6.0 5,500
Min/Max Range (16-20) 2021 2020
5,000
5.0
4,500
35%
4.0
39% 4,000
32%
3.0 3,500
23%
30% 3,000
2.0
43%
2,500
31%
1.0
27% 2,000
Source: TDM Source: CRB
0.0 1,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan '10 Jan '12 Jan '14 Jan '16 Jan '18 Jan '20
Data through October 28, 2021
• MOP imports, as reported by TDM, were up 35% y-o-y in Indonesia (+32%) and Malaysia (+42%) and we expect that to
potentially reach 5.2mmt by the end of this year.
• CPO prices remained volatile at very high levels due to strong vegetable oil and crude oil prices, lower-than-expected
recovery of palm oil production and solid demand.
22U.S. MOP imports have slowed to a more ‘normal’
level in Q3
Mil Tonnes U.S. Offshore MOP Imports
1.2
1.0 • Very large spring demand
and depleted inventories to
Other
0.8 start the year has
Germany
prompted strong import
0.6
Israel demand.
Belarus
• Imports from Belarus have
0.4 Russia yet to recede.
• Q4 imports are expected to
0.2 remain in the 450-550kt
range.
0.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2020 2021
Source: Genscape; USDOC, Mosaic
• Other includes Jordan
23Global Potash Demand
Mil Tonnes YoY Changes of MOP Shipments
KCl Global MOP Shipments (Mil Tonnes KCl)
75 5.0
69.5 – 72.5
China
4.0
70 0.9
3.0 India
1.0
65 2.0 0.6
1.2 Indonesia+
1.0 Malaysia
0.6 0.7
60 Latin America
0.0 0.4 0.5-0.2
-0.4
-1.5 -0.1 North America
55 -1.0
-2.0 Europe+FSU
50 -1.6
-3.0
Other
45 -4.0
10 11 12 13 14 15 16 17 18 19 20 21E 22F 2021E 2022F
Source: IFA, CRU, TFI and Mosaic
• We maintain our forecast for global MOP shipments in 2021 at ~70mmt, as downward revisions of China and
India were offset by higher forecasts for SE Asia and North America.
• Our preliminary forecast for 2022 calls for ~1.5% growth, primarily driven by our cautious view on recovery in
China and India and continued growth in SE Asia.
24Global Potash Shipment Forecasts by Region
November 2021
Muriate of Potash Low High Source: IFA, CRU and Mosaic
2020 2021E Comments (numbers may not sum to total due to rounding)
Mil Tonnes KCl 2022F 2022F
We revised down China MOP shipments this year to less than 15.0mmt. Lower domestic supply (lower production and producer inventories)
and lower imports (due to the low contract price disincentivizing suppliers to maintain historical volumes) reduced availability, while delayed
China 16.4 14.8 15.3 15.7 crop harvest and autumn planting dampened Fall potash demand. As a result of this latter issue, port offtake has slowed down in recent weeks
and port inventories creeped back up to ~2.6mmt by late-October. For 2022, we forecast MOP imports to rebound (assuming a timely
settlement of a new contract) on a need to refill the in-country pipeline and to satisfy moderate demand growth.
Lack of availability and impractical subsidy/import pricing dragged down potash shipments this year and we have revised our forecast ~450kt
lower. MOP imports likely will drop to ~3.5mmt in 2021, the 2 nd lowest level in more than a decade. With inventories dropping to very low levels
India 5.1 3.6 4.0 4.4 (-61% y-o-y) by late-October and large pent-up demand (due to solid farmer economics), we project MOP shipments to rebound by ~0.7mmt
next year (recovering about half of the reduction in ‘21), though adjustments to subsidy (and/or MRP) are likely necessary to achieve this.
CPO prices will likely remain volatile at elevated levels in 2022 on tight supply, lifting already-positive demand prospects. MOP imports in
Indonesia & Malaysia 4.3 5.2 5.5 5.9 Indonesia and Malaysia were up 35% y-o-y through August despite COVID-related labor/logistics restrictions at the plantations, and we have
revised our 2021 forecast ~250kt higher. We forecast MOP imports to grow again in 2022 and exceed the previous peak of 5.4mmt (in 2018).
Our 2021 forecast is unchanged. Regional imports are expected to slow down in Q4 (partly due to low seasonal requirements in some
Other Asia 4.9 5.2 4.9 5.1 markets) and could remain subdued as buyers awaits new price signals from contract negotiations in China and India over the next few
months. MOP imports are projected to slip slightly in 2022 from record or near-record levels this year as affordability weighs on demand.
Shipments in 2021 have exceeded prior expectations. We forecast potash shipments be just slightly lower in 2022 on healthy farmer balance
W. Europe 5.0 5.2 5.0 5.2 sheets, but we are monitoring how elevated farm input costs (nitrogen in particular) could curb potash demand in the region.
E. Europe & FSU 5.9 6.3 6.3 6.5 We continue to expect the market to grow next year in the face of healthy farm economics and favorable support policies.
Strong ag fundamentals fueled solid growth in crop nutrient demand this year, with total fertilizer shipments expected to reach a record of
Brazil 11.3 12.1 11.7 12.1 ~44mmt, up ~3.5mmt y-o-y Full year MOP imports are forecast to set another record, likely topping 11.7mmt, up almost 7% y-o-y. We took a
conservative view of 2022 prospects, as grower profitability shrinks from the very lofty levels seen the prior two years.
Other L. America 3.0 3.3 3.0 3.2 2021 shipments have been revised slightly higher, but the surge in fertilizer prices is expected to crimp potash demand slightly in 2022.
We revised North American shipments ~300kt higher to ~11.6mmt in 2021 (a record-high) as grower demand continued to surprise us to the
North America 10.4 11.6 11.0 11.3 upside. Despite strong imports year-to-date (+85% y-o-y Jan-Sep) and little-improved domestic output, prices continued to rise on supply
concerns, healthy fall demand and low channel inventory. We project shipments to moderate in 2022, assuming no or minimal channel refill.
The combined demand in this market (Oceania, Middle East and Africa) is expected to stay relatively flat in 2022 although the risk profile skews
Other 2.9 3.0 2.8 3.1 to the low side of the range due to affordability concerns, most notably in Africa.
We maintain our forecast for global MOP shipments in 2021 at ~70mmt and our preliminary forecast for 2022 shows a range of 69.5-72.5mmt,
Total 69.3 70.2 69.5 72.5 with a point estimate in the upper half of the range at 71.3mmt, representing ~1.5% growth. There remains meaningful upside to the forecast if
the recoveries in China and India exceed our cautious expectations.
252021E and 2022F Major Potash Market
Demand Summary
North America Brazil
Mil Tonnes KCl Mil Tonnes KCl
12 Record-setting 13 After 2 consecutive years
11.0 – 11.3 11.7 – 12.1
11.6
shipments of 11.6mmt of double-digit growth, we
11 in North America for 12 forecast Brazilian
12.1
2021 are expected to shipments to stay flat or
10 10.4 11 11.3
moderate as higher retreat slightly in 2022 due
9
prices trim demand 10
to tempered, though still
(but without positive, grower
8 meaningful channel 9 economics.
20 21E 22F stock recovery). 20 21E 22F
India Malaysia and Indonesia
Mil Tonnes KCl Mil Tonnes KCl
Imports to India will 5.5 – 5.9 Elevated CPO prices and
6.0 6.0
show a sharp drop in improving logistics
5.0 4.0 – 4.4 underpin strong potash
5.1 2021, but pent-up 5.0 5.2
4.0 demand and an empty demand in Malaysia and
3.0 3.6 channel should result 4.0 4.3 Indonesia. Total MOP
2.0 in at least a moderate imports are forecast to
3.0
1.0 rebound next year. recover to over 5.0mmt in
0.0 Additional subsidy will 2021 and over 5.5mmt in
2.0
20 21E 22F be key. 20 21E 22F 2022.
Source: CRU and Mosaic
26Potash S/D: Supply could potentially catch up with
demand in 2022
Projected MOP Supply/Demand Changes
Mil Tonnes KCl 2020 2021F 2022F Comments
Projected Shipment Changes 5.89 0.99 1.06 Moderate demand growth forecast after big upturn in 2020.
Percent Change 9.3% 1.4% 1.5%
Projected Supply Changes 3.95 0.98 1.94
SQM Production Adjustments 0.22 0.10 0.08 Incremental increases.
K+S Bethune Ramp-Up 0.31 0.08 0.13 Pond production to slowly ramp up (Phase I & II).
Eurochem Usolskiy Ramp-Up 1.08 0.03 0.05 Phase 1.1 capacity: 0.4mmt ramping from '22; Phase 2 capacity 1.0mmt startup in 2025.
Eurochem Volgakaliy Ramp-Up 0.04 0.11 0.10 Limited test production in '20-'21; Phase 1 capacity of 2.3mmt achieved in '25.
Recovery of S-2; Incremental increases from existing sites and S-3 expansion. Ust-Yayvinsky startup
Uralkali Production / Ramp-Ups 0.20 0.10 0.00
in 2024.
Belaruskali Petrikovsky 0.03 0.28 0.35 Ramp-up of 1.5mmt mine (first trial MOP production in August '20; official commissioning in August
'21). BPC sanctions could result in lower exports from Belarus, but this is not assumed in our base
case.
Net Changes from Others 0.64 0.03 0.09 Minor changes at ICL (Spain and Israel), Jordan, China, Europe, Laos etc.
Other Existing Utilization 1.44 0.25 1.15 NTR+MOS estimated operational changes
S/D Surplus (+) / Deficit (-) -1.94 -0.01 0.88
Source: Mosaic
A small “surplus” in 2022 is expected to develop in H2, allowing inventories
The potash market remains very tight in to be modestly rebuilt. However, a more pronounced recovery of
2021, with deferred demand in China/India India/China shipments (to 2020 levels) would flip the script to a ~1mmt
necessary to balance the market. “deficit”. Also note that we do not forecast a reduction in Belarus exports in
2022 in our base case, despite the sanctions, which may prove optimistic.
27Potash: Low inventories, particularly in India, should
encourage early settlement of new contracts
Mil Tonnes China Weekly MOP Port Inventory Mil Tonnes India MOP Inventory
5.0
Thousands
Min/Max Range (16-20) 2021 2020 2019 3.0
Trade Company
4.0
2.0
3.0
2.0
1.0
1.0
0.0 0.0
Jan Feb Mar Apr May Jul Aug Sep Oct Nov Dec Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21
Port Inventory: After dropping to ~2.3mmt in July, China Channel Inventory: total inventories in India fell below
MOP port inventories recovered to roughly 2.7mmt in mid- 800kt in late-October, down 61% or over 1.2mmt y-o-y.
October, down 26% or ~1.0mmt y-o-y.
Source: India Department of Fertilizer, Mosaic China
28Brazil Potash
Mil Tonnes Brazil MOP Imports Mil Tonnes Brazil MOP Imports
5.0 14
2021 Q1-Q3 11.3 – 11.7
12
4.0 13% or
1.0mmt y-o-y 10
3.0
8
2.0 6
4
1.0
2
0.0 0
Q1 Q2 Q3 Q4 10 11 12 13 14 15 16 17 18 19 20 21E 22F
2019=10.2mmt 2020=10.9mmt 2021=11.7mmt Actual/Estimate Forecast Range
• The Brazilian fertilizer market is forecast to grow to a record of ~44mmt in 2021. Total Brazilian MOP imports are likely to hit
~11.7mmt this year.
• Our 2022 expectations have been tempered, as the rapid surge of fertilizer (and other) costs constrains farmer economics,
resulting in flat to lower imports.
Source: ANDA, Siacep and Mosaic
29India Potash
Mil Tonnes India MOP Imports Mil Tonnes India MOP Imports
2.0 2021 Q1-Q3 6.0
32% or
1.16mmt y-o-y 5.0 4.0 – 4.4
1.5
4.0
1.0 3.0
2.0
0.5
1.0
0.0 0.0
Q1 Q2 Q3 Q4 10 11 12 13 14 15 16 17 18 19 20 21E 22F
2019=4.1mmt 2020=5.1mmt 2021=3.5mmt Actual/Estimate Forecast Range
• We expect MOP imports in India to plummet 32% to 3.5mmt for calendar year 2021, the lowest level since 2013. Many global
suppliers have been reluctant to place scarce tonnes under the low prevailing contract price.
• Imports are forecast to rebound to more ‘normal’ levels assuming that increases in CFR prices are offset by subsidy and MRP
increases. The risk profile skews to the low side given the uncertainty in subsidy development (in the face of elevated nitrogen
and phosphate prices too).
Source: FAI, India Department of Fertilizer, Mosaic
30China Potash
Mil Tonnes China MOP Imports Mil Tonnes China MOP Imports
3.5 2021 Q1-Q3 10
11% or 7.8 – 8.3
3.0 740kt y-o-y 8
2.5
6
2.0
1.5 4
1.0
2
0.5
0.0 0
Q1 Q2 Q3 Q4 10 11 12 13 14 15 16 17 18 19 20 21E 22F
2019=9.1mmt 2020=8.8mmt 2021=7.6mmt Actual/Estimate Forecast Range
• MOP imports dropped in Q3 as expected and total (gross) imports are forecast to decline to ~7.6mmt this year.
• Our China team reported growing concerns of less attractive fertilizer affordability and delayed harvest – that could negatively
impact potash demand in Q4.
• For 2022, we expect MOP imports to rebound, assuming timely settlement of new contract, on a need to refill the in-country
pipeline and to satisfy moderate demand growth.
Source: China Customs and Mosaic
31Potash Outlook: New supply expected to slightly trail
demand, leading to higher industry operating rates
Mil Tonnes Utilization
KCl Global MOP Shipments
80 100%
• We have made limited changes to our
75 95% medium-term view.
• We continued to expect range-bound
70 90%
global capacity utilization (at generally
elevated levels) over the next few years
65 85%
based on steady demand growth and
continued ramp-up of existing
60 80% brownfield and greenfield projects.
55 75%
50 70%
~2.6% CAGR ~2.0% CAGR
45 65%
10 11 12 13 14 15 16 17 18 19 20 21E 22F 23F 24F 25F
Actual/Estimates Mosaic Forecast Ranges
CRU - September 2021 Capacity Utilization
Source: IFA, CRU and Mosaic
32Strong economic rebound from COVID-low and tight
ag fundamentals
World G&O Demand vs. World Real GDP
% Mil Tonnes World Less China Grain and Oilseed Stocks Percent
(y-o-y % change) 475 23%
8.0 Source: USDA
450 22%
6.0 425 21%
400 20%
4.0
375 19%
2.0 350 18%
325 17%
0.0
300 16%
-2.0 275 15%
250 14%
-4.0
Source: USDA; World Bank; IMF Oct 2021 Forecast (World GDP) 225 13%
-6.0 200 12%
00 02 04 06 08 10 12 14 16 18 20 00 02 04 06 08 10 12 14 16 18 20
World GDP Growth (%) World G&O Demand Growth (%) Stocks Percent of Use
• Global G&O balance sheets are snug – S:U ratio dropping to 15.9% in 2020/21 (lowest since 2007/08).
• USDA’s forecast calls for the stocks-to-use ratio remaining low in 2021/22, even in the face of a projected ~3% increase in
global harvest.
33China’s appetite across a wide range of ag
commodities continues to drive ag markets
Mil Tonnes China Corn Imports China Ag Commodity Imports
(cumulative) 2015: 4.7 Chg (%) September 2021 YTD Y-o-Y Changes
28 2016: 3.2 300%
275% 2017: 2.8 Corn
y-o-y change
24 2018: 3.5 275%
284%
2019: 4.8 200%
20 297% 2020: 11.3
318% Barley
16 85%
323% 100% Beef
12 Poultry 11%
301% -4% Wheat
8 438% 29%
414% 0%
356% Pork
4 Soybean
-1% -6%
0 -100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -3.0 2.0 7.0 12.0 17.0 22.0
10-yr Range 2020 2021 Chg (mil tonnes)
Source: China Customs
• Since May, China’s monthly corn imports have averaged ~3.3mmt. Prior to 2020, the highest monthly import volume was
1.16 (reached in April of 2016). This pushes YTD imports to an eye-popping record of 24.9mmt (+275% y-o-y).
• China’s soybean import growth has slowed slightly in 2021 (vs 2020), but still very strong by historical standards.
• Growth in major meat imports (pork + beef + poultry) have also slowed relative to 2020, as China has worked to rebuild its
hog inventory and higher retail prices have stymied domestic consumption. That said, beef imports remain up 11% y-o-y.
• We expect Chinese imports of ag commodities to continue to be elevated through 2022.
3420/21 U.S. corn demand supported by recovering ethanol
grind and elevated export demand; 21/22 to remain strong
Mil Gallons
U.S. Weekly Fuel Ethanol Mil Gal/Day Bil Bu U.S. Corn Use
Stocks Production 2017-19 Avg Feed & Residual Ethanol Other FSI Exports
1,200 50 18
Thousands
Source: USDA
1,100 45 15
2.4 2.1 2.8 2.5
1.8
1,000 40 12 1.5 1.4 1.4 1.4
1.4
900 35 9
5.6 5.4 4.9 5.0 5.2
800 30 6
700 25 3 5.3 5.4 5.9 5.6 5.6
Source: EIA
600 20 0
Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Jan '21 17/18 18/19 19/20 20/21E 21/22F
Data through October 22, 2021
• Ethanol production has recently recovered to near its pre-COVID level.
• USDA projects ethanol grind to rebound to 5.03 bbu in 20/21 and 5.20 bbu in 21/22.
• U.S. corn use reached a record high of 14.8 bbu in 20/21. We see strong export demand (upside risk to latest USDA
expectation) to continue into the 21/22 crop year and could keep corn use at a similar level next year.
• U.S. corn stocks-to-use ratio is estimated to have dropped to 8.3% in 2020/21 (revised higher), but still tight relative to recent
history (2013/14-2019/20 averaged 13.4%). USDA currently projects a S:U ratio of 10.1% for 21/22 on their higher
production estimate in the October WASDE.
35U.S. farm economics are still constructive despite
rapid run-up of all costs
Bil $ U.S. Farm Sector Net Cash Income $ per acre Estimated Corn Farmer Returns
160 in Central Illinois (high-productivity farm)
Gov't Payments "Market" 500
140
400
120
100 300
80 200
60
100
40
0
20
0 -100
10 11 12 13 14 15 16 17 18 19 20 21F 22F 2005 2007 2009 2011 2013 2015 2017 2019 2021E
Source: USDA & Mosaic (22F) Source: University of Illinois, USDA, CBOT, Mosaic
• 21/22 farmer economics have been supported by tight commodity markets and ongoing CFAP payments.
• 22/23 farmer economics are expected to be down relative to 21/22, but still relatively healthy.
• Costs are expected to be up across the board.
• Government payments are expected to decline relative to the past couple years that have been boosted by CFAP
and market facilitation payments (offsets for retaliatory tariff impacts).
Note: Central Illinois farmer returns are for illustration only and calculated after estimated land rent. Historical data based on published information from University of Illinois and
Farm Business Farm Management (FBFM). 2021E and 2022F returns are based on CBOT nearby and Dec ‘22 corn future contracts and fertilizer cost assumptions by Mosaic.
We also assume certain percentage increases in other inputs (i.e. seed, chemicals, energy) in the 2022 forecast. 36Additional breathing room for stocks expected in
2021/22, but still rather tight markets
Stocks-to-Use Ratio Corn
10-year
18/19 19/20 20/21E 21/22F
Corn & Soy Wheat Average
Corn Soybeans Wheat
25% 60% Planted Acreage
91.4 88.9 89.7 90.8 93.3
(mil acres)
Yield (bu/acre) 161.5 176.4 167.4 171.4 176.5
20% 50% Use (bil bu) 13.5 14.3 14.0 14.8 14.8
Exports (bil bu) 1.8 2.1 1.8 2.8 2.5
28.5% Carryout (bil bu) 1.6 2.2 1.9 1.2 1.5
15% 40%
Stocks-to-use 11.8% 15.5% 13.7% 8.3% 10.1%
10.1%
10-year
10% 30% Soybeans 18/19 19/20 20/21E 21/22F
Average
8.3%
Planted Acreage
7.4%24.2% 7.3% 81.1 89.2 76.1 83.1 87.2
(mil acres)
5% 5.7% 20%
Yield (bu/acre) 46.4 50.6 47.4 51.0 51.5
2.6% Use (bil bu) 3.7 4.0 4.0 4.5 4.4
0% 10% Exports (bil bu) 1.7 1.8 1.7 2.3 2.1
00 02 04 06 08 10 12 14 16 18 20 Carryout (mil bu) 318 909 525 256 320
Source: USDA
Crop Year Stocks-to-use 8.3% 22.9% 13.3% 5.7% 7.3%
Source: USDA (October WASDE)
10-year average = average 2010/11 – 2019/20
37Positive demand developments overshadow
potential supply recovery in the palm oil market
Mil Tonnes Malaysia & Indonesia Total Palm Oil Stocks Mil Tonnes Malaysia & Indonesia Total Palm Oil Exports
(Crude Oil and Processed Oil) (Crude Oil and Processed Oil)
8.0 8.0
2020 2021 2020 2021
Sources: MPOB, IPOA
6.0 6.0
4.0 4.0
2.0 2.0
0.0 0.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
▪ Malaysia and Indonesia total palm oil stocks have lagged behind 2020 for much of the year despite the marginal production gains.
▪ Demand (especially exports) has been healthy and recent policy changes further improve export prospects.
• India removed restrictions on imports of refined palm oils and reduced import taxes.
• Indonesia cutting the ceiling rate for CPO export levies (on July 2) led to an increase in July exports and dramatic y-o-y increases in August.
• Indonesian domestic demand has also picked up y-o-y - more than offsetting 2020 declines in food and biodiesel uses. While
lagging 2020, domestic demand in Malaysia for crude palm oil has been increasing throughout 2021, reaching 2020 levels in
September.
38Coffee and sugar prices are soaring on supply concerns
$/cwt Coffee $/cwt Sugar
Daily Close of Front Month Contract Daily Close of Front Month Contract
225 22
200 20
18
175
16
150
14
125
12
100 10
Source: NYMEX Source: NYMEX
75 8
Jan '17 Jan '18 Jan '19 Jan '20 Jan '21 Jan '17 Jan '18 Jan '19 Jan '20 Jan '21
Data through October 28, 2021
• Sugar prices rebound from a 12-year low to a 4-year high. Prices are supported by weather-related supply concerns.
• Brazil production concerns (e.g. due to frost damage) have resulted in a surging coffee market.
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