Further to my last point/post - just read the Aussie "Pure...

Further to my last point/post - just read the Aussie "Pure Spculation"

We ran out of space in the Monday print edition so the item on phosphate was rather truncated. However, the publication yesterday of the latest World Agronomy Report from ABN AMRO and Virtual Metals allows a chance to make amends. ?Among farming inputs, fertiliser will command the most attention in 2011,? the report says.

China is about to emerge as a net importer of urea and diammonium phosphate (DAP) as it curbs its exports of those products in order meet domestic needs. New production capacity, especially in Morocco from 2013, will help dampen down prices for DAP in the long term but, more immediately, prices should climb in 2011. Present US farm-gate prices for DAP of $US606 a short tonne could jump as high as $US800 by this time next year.

?We expect fertiliser prices will rise by between 15 and 20 per cent during 2011? and will be set for further advances the following year,? says the report.

That, of course, will not be much help to the bulk of the Australian companies, as production for most is still a long way off. But the long term picture must be positive: with declining areas of arable land around the world, fast growing populations in the developing countries, and demand for better quality food from the new middle classes of Asia, fertiliser is the key to making surviving arable land produce even more per hectare.