Credit Suisse Raises Fertilizer Price Forecasts on Demand

Date:02-20-2010

Feb. 17 (Bloomberg) -- Credit Suisse Group AG raised its target prices for nitrogen, potash, and phosphate as global demand for the crop nutrients recovers.

Credit Suisse raised its 2010 forecasts for urea by $20 per metric ton for all regions, for diammonium phosphate, or DAP, by $65 per metric ton for all regions, and for standard muriate of potash, or MOP, by as much as $10, depending on region, the bank said in a note to clients today.

“We have seen solid demand for all three nutrients,” analysts including Lars Kjellberg wrote, adding they anticipated a strong demand recovery. They cited attractive prices, an improving economy, better availability of credit for farmers, and the need for distributors to replenish depleted inventories.

Nitrogen prices have moved higher on increasing demand and rising natural gas prices, Credit Suisse said. An increase in phosphate prices was caused by growing demand and the rising cost of raw materials ammonia and sulfur. Potash prices rose sooner than the bank had anticipated, it said in the note.

The bank also raised its 2011 price forecasts by $10 for urea in all regions, by $30 for DAP in all regions, and by 5 euros ($6.87) for MOP in northwestern Europe.

Credit Suisse also raised share price targets for K+S AG, Europe’s largest potash producer, to 41 euros from 33 euros on the new forecasts, and for Israel Chemicals Ltd., to 51 shekels from 50 shekels. The bank raised its price target for OAO Uralkali, Russia’s second-largest potash producer, to $29.60 from $29.20, and cut its target for OAO Silvinit, Russia’s largest potash producer, to $760 from $880.