Monday, July 11, 2016

Potash price to fall for years, as Credit Suisse warns on 'false hope' (POT; MOS; CF; AGU)

From Agrimoney:
Credit Suisse forecast potash prices to fall until at least 2018, as it warns on "false hope" in the agricultural sector.

"It remains too early to call the cycle bottom and we remain cautious on the sector," Credit Suisse said.

"In our view, potash markets are the most at risk," the bank warned.

'False hope'Credit Suisse warned of "false hope for an ag cycle rebound".

And even in crop prices do rise, the bank remains bearish on crop nutrient prices, due to long term oversupply of the market, and heavy inventories.

Although fertilizer inventories have been shrinking, Credit Suisse argues that this was "more of a structural shift in purchaser behaviour".

Credit Suisse said lingering volatility in emerging market was impeding growing, with headwinds to demand likely to continue.

"Despite the Brazilian real and other currencies stabilizing, we note that credit and end market demand for fertilizers remain an issue," said the bank.

Years of low pricesThe bank was most bearish on prospects for potash prices, suggesting that a price recovery "will elude us for years, not quarters".

"We maintain our view that persistent market oversupply is the primary culprit for weaker prices."...