Phosphate rock and phosphate fertilizer production will also witness a number of changes in 2013. Morocco, which currently possesses about 85 percent of global phosphate reserves, is expected to continue to grow its importance in the industry.
In particular, the closure of Agrium's (NYSE:AGU) Kapuskasing phosphate rock mine in 2013 will result in more phosphate rock being imported from Morocco.
Saudi Arabia's Ma'aden will also develop its significant resources, and in doing so will help shift Middle Eastern and North African resources to the center of global agricultural markets.
Global growth uncertain
Most important during the next year will be the overall health of the global economy. If global economic growth remains slow in 2013, much of the agricultural demand that is anticipated — and would drive phosphate use — will fail to materialize.
The Organization for Economic Co-operation and Development has projected that compared to 2012 level's, economic growth levels for 2013 will be flat for developed economies, with the United States and Germany slowing slightly.
Global growth will continue to be driven by developing and emerging economies, and is forecast to grow 5.1 percent — up from 2012's 4.6 percent — a United Nations global growth forecast projects.
In recent months, phosphate trade has been slow, with buying soft in most major markets. Prices "[remain] under pressure as producers long on product search for buyers," Credit Suisse reported.
Another important factor to consider throughout 2013 will be weather. After record droughts plundered plantings in the US, Brazil, Russia and Europe, Mother Nature will continue to keep investors guessing throughout the coming year.
Securities Disclosure: I, James Wellstead, hold no direct investment interest in any company mentioned in this article.
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