June 15, 2017 | There are several seabed phosphate mining projects under development, but no companies are currently extracting phosphate from the seafloor. … Read MoreGet Phosphate Stock Investor Kits
May 31, 2017 | What exactly is the difference between potash and phosphate? Both are used to produce fertilizers, but they are not interchangeable. … Read MoreGet Phosphate Stock Investor Kits
May 18, 2017 | A vessel carrying a shipment for Canada’s Agrium was detained in Panama Wednesday night. It is the second to be stopped this month. … Read MoreGet Phosphate Stock Investor Kits
Phosphate’s primary function is to support strong cell development and water retention. A whopping 90 percent of it is applied to crops to aid plant growth, and it is critical for all living organisms.
Because of its essential properties, and since there is no known substitute for it, phosphate can be found in fertilizers all over the world. It is also used as a supplement in animal feed, as a food preservative and for several other chemical purposes.
As the world’s population grows and demand for food increases, demand for phosphate is only expected to increase. For that reason, some believe phosphate investing is compelling. Read on for a brief overview of the phosphate market, including supply and demand dynamics and investing options.
Phosphate investing: Supply and demand
According to the US Geological Survey’s most recent report on phosphate, global phosphate rock production came in at 261 million MT in 2016, up from 241 million MT in 2015. The increase was mainly the result of increased output in China and Tunisia.
China was the top phosphate rock producer last year by a long shot, putting out 138 million MT. Morocco and Western Sahara were in second place with output of 30 million MT. Active phosphate mines are present in a large number of other countries as well, including Russia, Tunisia, Jordan, Brazil, Israel, South Africa, Syria, Togo and Senegal.
The largest phosphate reserves are found in Morocco, which is home to about 75 percent of global reserves. The US also holds large phosphate deposits, particularly in Florida, North Carolina, Idaho and Utah. The US produced 27.8 million MT of phosphate rock in 2016.
In terms of demand, the need for phosphate has been slowly increasing over the last few years. It stood at 40.6 million MT in 2012, and is expected to reach 46.6 million MT by 2018. As mentioned, the world’s growing population and need for food should keep demand growing steadily well into the future as well.
Phosphate investing: Consider stocks
With the future of phosphate looking bright, some investors are wondering how to get into the space. There are certainly ways to do so, although phosphate investing is a little trickier than investing in more mainstream commodities like gold and silver.
One way investors can invest in phosphate is by buying shares of an exchange-traded fund that includes exposure to phosphate. The Global X Fertilizers/Potash ETF (ARCA:SOIL) is one example. However, most market participants choose to invest directly in phosphate-focused companies. Three of the largest producers are Mosaic (NYSE:MOS), PotashCorp (NYSE:POT) and Agrium (TSX:AGU,NYSE:AGU).
Information on smaller phosphate companies that have been working to advance their projects can be found here, and will be updated in the near future.
This description was last updated in April 2017.