August 2021 – Market Update · 2021. 8. 2. · then the havoc caused by cold Q1 weather, pushed refinery rates (and hence sulphur production) lower in 2020 and H1 2021, but has

August 2021 – Market Update

Forward Looking StatementsThis release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are notlimited to, statements about proposed or pending future transactions or strategic plans and other statements about future financial and operating results. Suchstatements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. Theserisks and uncertainties include, but are not limited to: the economic impact and operating impacts of the coronavirus (Covid-19) pandemic, the potential drop in oildemand/production and its impact on the availability and price of sulfur, political and economic instability and changes in government policies in Brazil and othercountries in which we have operations; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy andtransportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distributionchannels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency andexchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates,including the performance of the Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the timely development and commencement of operations ofproduction facilities in the Kingdom of Saudi Arabia, and the future success of current plans for MWSPC and any future changes in those plans; difficulties withrealization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initiallyanticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing isdisadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes inenvironmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or othergreenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow ofexcess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints thatMosaic’s operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges tonecessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic’sprocesses for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of theUnited States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing frommanagement’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadianresources taxes and royalties, or the costs of the MWSPC; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/oravailable debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s potash mines; other accidents and disruptionsinvolving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risksassociated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filedwith the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.

Agriculture prices remain elevated on tight S/D; Robust fertilizer demand persists despite higher prices

3

75

100

125

150

175

200

225

Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21

2018=100 Commodity PricesIndexed Daily Close of Front Month Contract

Corn Soy Palm Oil

Source: CME; MDEX0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

10 11 12 13 14 15 16 17 18 19 20 21

Plant Nutrient AffordabilityPlant Nutrient Price Index / Crop Price Index

Affordability Metric Average 2010-present

Sources: Weekly Price Publications, CME, USDA, AAPFCO, Mosaic

Data through July 29, 2021

Less Affordable

More Affordable

Corn/bean prices have slipped from their peaks while fertilizer prices have continued to rise, swinging the affordability index above average recently (but at a level that historically has not resulted in meaningful demand destruction).

Commodity Current Price YTD Y-o-Y

Corn $5.58/bu +15% +77%

Soybean $14.34/bu +9% +61%

Palm Oil MYR4,673/t +18% +71%


Strong demand combined with supply disruptions have accelerated positive pricing momentum in Q2

4

200

300

400

500

600

700

800


$ per tonne Global DAP/MAP Benchmark PricesPublished Spot Prices

DAP fob NOLA DAP c&f IndiaMAP fob NOLA MAP c&f Brazil

Source: Argus; Green Markets

200

300

400

500

600

700

800


$ per tonne


Published MOP Prices

c&f SE Asia delivered Corn Belt c&f Brazil

Phosphate prices in 2021:• NOLA DAP + $240 / tonne; MAP + $234 / tonne• Brazil MAP + $335 / tonne• India DAP + $259 / tonne

Potash prices in 2021:• Brazil + $430 / tonne• U.S. Midwest + $303 / tonne• SE Asia + $215 / tonne

*weekly average reported spot pricing for prompt deliveryData through July 29, 2021

Phosphate: Industry margins resumed their ascent in Q2

5

150

200

250

300

350

400

450

500

Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21

$ per Tonne High-Analysis Phosphate Global Net PriceCalculated from Published Weekly Spot Prices

Source: Argus, Mosaic


• Phosphate industry margins –using the global net price as a proxy – slid early in Q2 as fertilizer prices stalled and raw material prices rose.

• Fertilizer prices then moved higher on strong seasonal demand and large/early summer fill interest.

• Most of this rise in phosphate prices passed through to higher benchmark margins due to raw material benchmarks rising at a slower pace.

Global net price averages several global price benchmarks for finished phosphates and raw materials. It does not include anyhandling, storage, transportation or conversion costs.

Raw material prices up sharply y-o-y, but relief expected in H2 2021 on increased supply

6

30

40

50

60

70

80

90

100

110

Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Jan '21

Percent U.S. Gulf Coast Utilization of Refinery Operable Capacity

Average (2015-2019)

Covid-19

Hurricane Harvey

Deep Freeze

Source: EIA

• Lower demand for fuels during the height of COVID-19, then the havoc caused by cold Q1 weather, pushed refinery rates (and hence sulphur production) lower in 2020 and H1 2021, but has rebounded to ~92% utilization, its pre-COVID average.

• Sulphur price (Q3) up $138/LT or 239% y-o-y• Ammonia price (August) up $420/MT or 205% y-o-y• Raw material prices are expected to moderate later in

the year on increased supply

0

50

100

150

200

0

200

400

600

800

Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21

Sulphur$/LT

Ammonia$/MT

Weekly Raw Materials Pricesc&f Tampa

Ammonia Sulphur

Source: Argus

Data through July 29, 2021 Data through July 23, 2021

1.61.4

2.1

0.0

0.5

1.0

1.5

2.0

2.5

2019 2020 2021

U.S. H1 ImportsMil Tonnes DAP/MAP/NPS/TSP

2021 H1 Regional Phosphate Roundup

7Source: FAI, India Department of Fertilizer, Genscape, China Customs, Siaesp, Mosaic

U.S. imports from offshore sources continued to trend higher in Q2. H1 imports were up 53% or over 720kt y-o-y.

Indian DAP imports picked up in Q2 thanks to sizable shipments from Saudi Arabia and China. However, H1 arrivals still lagged 24% or 526kt y-o-y.

Strong incentives boosted exports from Chinese ports (particularly strong in May/June). H1 exports were up 55% or almost 2.1mmt y-o-y.

Imports already reached a record high level in H1 before heading into the peak import season. Brazilian phosphate imports were up 489kt or 14% y-o-y.

2.9

2.21.6

0.00.51.01.52.02.53.03.5

2019 2020 2021

India H1 ImportsMil Tonnes DAP

4.73.8

5.9

0.01.02.03.04.05.06.07.0

2019 2020 2021

China H1 ExportsMil Tonnes DAP/MAP/TSP

3.13.6

4.1

0.0

1.0

2.0

3.0

4.0

5.0

2019 2020 2021

Brazil H1 ImportsMil Tonnes DAP/MAP/NPS/TSP

U.S. phosphate fertilizer imports surge in H1 on strong on farm demand (i.e. without a channel inventory build)

8

• Trade flows continued to adjust in H1 2021.

• Strong demand in the U.S. attracted products from a more diversified supply base.

• On the basis of the strong demand and low channel inventories to start the year, imports are estimated to be over 50% higher y-o-y through H1.

• Our estimates of channel inventories continue to point towards below average levels.

• Includes small volumes from Morocco for bonded shipment to Canada via the U.S. • Other origins include Australia, Egypt, Lebanon, Senegal, Tunisia.

Source: Genscape; market publications, Mosaic

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Q12020

Q2 Q3 Q4 Q12021

Q2

Mil Tonnes U.S. Offshore Phosphate Imports(DAP/MAP/NPS/TSP)

Other

Lithuania

Jordan

Mexico

Saudi

Israel

Russia

Morocco

61

6667 67

70 7071

7473 72

76

50

55

60

65

70

75

80

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes Global Phosphate ShipmentsDAP/MAP/NPS/TSP

Global Phosphate Demand

9

77 - 79

* NPS products included in this analysis are those with a combined N and P2O5 nutrient content of 45 units or greater.

• After global shipments grew by over 5% y-o-y in 2020, we continue to expect more modest demand growth of nearly 3% in 2021.

• Tight supplies from the producer level through the distribution pipeline continue and are expected to keep the market snug.

0.00.90.6

0.10.7 0.0

1.21.2

0.1 0.30.2

-0.7

1.0

0.2

-1.5

-0.5

0.5

1.5

2.5

3.5

4.5

2020 2021F

YoY Changes of Phosphate Shipments(Mil Tonnes DAP/MAP/NPs/TSP)

China

India

Other Asia

Brazil

Other L Amer

Europe+FSU

North America

Global Phosphate Shipment Forecasts by Region

10

DAP/MAP/NPS*/TSPMil Tonnes 2019 2020E Low

2021FHigh

2021F Comments

China 17.8 18.8 18.9 19.2

We continue to expect domestic phosphate shipments to grow modestly in 2021 in the face of positive ag fundamentals and strong incentives to boost yields. CPFIA reported DAP/MAP production was up 17% from last year’s COVID-impacted level (through May), allowing an opportunity for increased exports, which also rebounded on the strength of global demand and significantly higher prices. H1 exports of 5.9mmt were up 55% y-o-y. Tight supply domestically prompted some producers to voluntarily restrict exports to ensure domestic supply (and more formal restrictions are possible, though we have assumed none in our forecast). We believe exports will scale back substantially in H2 despite high production levels being maintained, high international prices and strong demand, though due to the strength of H1 volumes we have lifted our full-year export forecast to 9.6-10.0mmt (vs 9.3mmt in 2020). There is downside risk to those volumes if formal export restrictions are imposed.

India 11.2 11.5 10.5 10.8

India phosphate shipments are forecast to drop 7% in 2021, with H1 DAP sales and imports down 13% and 24% y-o-y, respectively. Shipments are being constrained by available international supply to what is one of the lowest netback markets, as well as importer economics that are loss-making without an adjustment to MRP and/or subsidy levels. While domestic DAP fabrication is expected to ramp-up during H2, we remain cautious about the nation’s ability to secure all of their desired imports (~2.5mmt in Q3) due to tight international supply. Regarding farmer demand, fertilizer sales picked-up in June and are expected ramp up with more rainfall in the forecast and accelerated sowing for the Kharif crop (which was several percentage points below average through July). Channel inventories are expected to stay low throughout 2021.

Other Asia/Oceania 9.4 9.5 9.7 10.0Favorable weather patterns in the region and strong farmer economics support demand growth this year, and preliminary trade data shows multiple importing nations (Thailand, Philippines, etc.) in the region registered double-digit import growth y-o-y through May. Pakistan imports could reach ~1.6mmt by the end of the year. We have assumed a slowdown in total regional imports from the strong H1 pace, believing that prevailing prices may cause some deferral into 2022. Also impacting our 2021 forecast was a rebasing of 2020 shipments lower.

Europe and FSU 6.6 7.2 7.2 7.4The expectation of typical fall demand in Europe coupled with steady expansion in the FSU should support some growth in the region. Rapid increases of fertilizer prices may lead to some cautious H2 buying in Europe, offsetting some of the strong pace seen earlier this year, while Russian shipment growth seems more secure given steps taken to ensure supply and stabilize prices.

Brazil 8.4 9.6 10.7 11.0Our forecast of total phosphate shipments in Brazil has been revised higher and now shows volume surging to nearly 11mmt this year. Phosphate imports were up 14% or almost 0.5mmt in H1, and record-high imports are expected to arrive in Brazil in Q3 in the face of strong demand and slow domestic production. While some market participants have shown concerns on huge import arrivals due to potential logistical constraints, the nation needs to step up with imports to prevent stocks from dropping to dangerously low levels in H2.

Other Latin America 4.1 4.8 4.7 4.9 We expect demand to remain broadly flat in 2021. Ag fundamentals remain solid, but we remain cautious on buyer appetites in H2 in the face of higher import prices.

North America 9.6 9.6 10.3 10.6Strong ag commodity prices and high planted acreage had driven on-farm demand sharply higher during spring (after following a strong fall). Imports in H1 surged over 50% y-o-y as wholesalers/retailers looked to source products from a wider range of origins to serve the strong demand. Big shipments into North America (from imports and domestic suppliers) do not appear to be replenishing channel inventories given the strong demand pull. We continue to project the market to range 10.3-10.6mmt this year (only the 2nd year on record to exceed 10mmt).

Other 5.0 5.0 5.0 5.2 We remain optimistic that demand could post modest gains in 2021, though we have trimmed our forecast based on affordability concerns.

Total 72.1 75.9 77.0 79.0 We continue to expect global shipments to increase nearly 3% (~2mmt) to 78.0mmt and maintain our forecast range of 77-79mmt. Depleted producer and channel inventories are expected to keep the market tight in 2021, which bodes well for shipment expectations in 2022.

Source: IFA, CRU and Mosaic(regional figures may not sum to total due to rounding)

* NPS products included in this analysis are NP and NPS products with a combined N and P2O5 nutrient content of 45 units or greater.

August 2021

2021F Major Phosphate Market Demand Summary

11Source: CRU and Mosaic

Strong on-farm demand and low channel inventories have resulted in a surge of imports this year. Total North America shipments are forecast to grow almost 10% in 2021.

Supportive MSPs and prospects of a normal monsoon support demand in India, but lower supply availability is forecast to drag total shipments down by ~7% from last year’s relatively high level.

After a 14% surge in 2020, very strong ag fundamentals are forecast to drive Brazilphosphate fertilizer shipments up another 13% in 2021. Phosphate imports are forecast to jump 16% this year.

9.6 9.610.5

0

2

4

6

8

10

12

19 20 21F

North AmericaMil Tonnes DAP/MAP/NPS/TSP

17.8 18.8 19.0

0

5

10

15

20

19 20 21F

ChinaMil Tonnes DAP/MAP/NPS/TSP

8.49.6

10.8

0

2

4

6

8

10

12

19 20 21F

BrazilMil Tonnes DAP/MAP/NPS/TSP

11.2 11.510.7

0

2

4

6

8

10

12

19 20 21F

IndiaMil Tonnes DAP/MAP/NPS/TSP

We estimated phosphate shipments to increase ~1.0mmt last year. Demand in China is expected to inch higher this year in the face of good farmer economics.

Phosphate Supply / Demand Forecast(Incremental Y-o-Y Change)Mil Tonnes DAP/MAP/NPS/TSP 2020E 2021F Comments

Projected Shipment Changes 3.80 2.14Percent Change 5.3% 2.8%

Potential Supply Changes 0.17 1.89Base Case China Export Change -0.81 0.54 Strong incentives attract higher export volume in 2021. OCP Line F Ramp-Up and Debottlenecking 1.50 0.05 Commissioning likely delayed to end-'21; Line F reachees full capacity end-'22.MWSPC Ramp-Up -0.11 0.34 Production recovers to ~2.4mmt DAP-equivalent after setback in 2020.GCT M'dilla Commissioning / Ramp-up 0.00 0.09 Reports of higher downstream output this year, but labor unrest remains an issue.Turkey/Egypt Greenfields 0.27 0.18 We assume both projects achieve full utilization in 2021.Russian Expansions 0.00 0.15 Incremental volumes from PhosAgro Volkhov.Other Ramp-Ups / Closures -0.13 0.09 NTR Redwater resid. ('20); CIL-India expansion ('20/21); Philphos restart ('21).Misc. Known Operational Changes 0.55 -0.35 e.g. IPL-Australia rebound ('20); Misc outages in H1 '21 (U.S./S. Africa/Tunisia).COVID-19 Curtailments '20 / Recovery '21 -1.10 0.80 Production recovery of ~2/3's of volume lost in 2020.S/D Surplus (+) / Deficit (-) -3.63 -0.25

Source: Mosaic

Moderate demand growth forecast, as higher prices may curb strong growth seen in 2020 (through a depleted channel will act as an offset)

Phosphate S/D: We continue to anticipate a more balanced (though still tightening) market in 2021

12

The large “deficit” in 2020 was offset by a correspondingly large drawdown in producer inventories (to historically low levels); channel inventories were also pulled lower (though not

addressed in the above analysis).

Closer to balance in 2021, but still a deficit, despite assuming demand growth roughly halves and production jumps ~1.7mmt y-o-y; note that

these estimates necessarily do not allow for inventory restocking (producer or channel).

Phosphate: Inventories at both producer and channel levels significantly lower y-o-y

13Source: India Department of Fertilizer and CPFIA

Channel Inventory: India inventory figures provide a proxy for how global channel inventories have evolved:• Trade inventories in late-July of 1.3mmt are 45% lower

y-o-y.• Company inventories in late-July of 1.1mmt are 36%

lower y-o-y.• Total inventories in late-July are 1.7mmt lower y-o-y.

Producer Inventory: China producers inventory figures provide a proxy for how global producer inventories have evolved:• Inventory as of the end of May of 1.3mmt were 13% or

0.2mmt lower y-o-y.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Mar-19 Sep-19 Mar-20 Sep-20 Mar-21

Mil Tonnes India DAP Inventory

Trade Company

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan-19 Jul-19 Jan-20 Jul-20 Jan-21

Mil Tonnes China DAP/MAP Producers Inventory

MAP DAP Source: CPFIA

Brazil Phosphates

14

2020 4% or43 kt y-o-y

Source: ANDA, Siacesp, Mosaic

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Q1 Q2 Q3 Q4

Mil Tonnes Brazil Phosphate Imports(DAP/MAP/TSP/NPS)

2019=6.8mmt 2020=8mmt 2021=9.3mmt

2021 H1 14% or489kt y-o-y

• Market sentiment is positive and farm economics for most nutrient-intensive crops remain healthy in Brazil. The consensus view points to another record-breaking year with total fertilizer shipments exceeding 43mmt (up from 40.6mmt in 2020).

• Estimated in-country phosphate inventories at end-June were below 1.6mmt, down 23% or 480kt y-o-y. • Our team in Brazil revised their import expectation higher for the second-half of the year citing significant additional volume

needed to prevent stocks from dropping to dangerously low levels.

0123456789

10

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes Brazil Phosphate Imports

DAP TSP MAP/NPS Forecast Range

2019: 6.82020: 8.02021F: 9.3

9.2 – 9.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Q1 Q2 Q3 Q4

Mil Tonnes India DAP Imports

2019=5.6mmt 2020=6.3mmt 2021=5.7mmt

India DAP

15

2021 H1 24% or526kt y-o-y

• DAP fabrication returned to the 400kt level (first time since December 2019) in June. While DAP output is still down 473kt (or -23%) y-o-y, we expect the industry to play catch-up and could end the year in the 3.8-4.0mmt range (versus 4.1mmt in 2020).

• Better supply from domestic producers has yet to improve the tight situation in India and DAP inventories remain precariouslylow – down 41% y-o-y as of late-July.

• Monsoon revival, after a patchy start, will boost Kharif sowing and fertilizer sales. Product availability remains a critical concern.• We have trimmed our import forecast modestly due to currently-unworkable importer economics and H1 volumes

being down over 0.5mmt y-o-y.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes India DAP Imports

Actual Forecast Range

5.6 - 6.0

2019: 5.62020: 6.32021F: 5.7

Source: FAI, India Department of Fertilizer, Mosaic

China Phosphates

16

• Phosphate exports ballooned to over 4.0mmt in Q2, boosting total exports to a record-high of 5.9mmt in H1, up 55% y-o-y. • High export demand, solid domestic buying, improved margins/netbacks and higher capability (in the absence of COVID-19

interruptions in 2020) stimulated a supply response. CPFIA reported DAP/MAP production were up 17% y-o-y through May although monthly output has been trending slightly downward to below 2.3mmt per month (due to scheduled maintenance) versus over 2.4mmt per month in Q1.

• We expect exports to scale back significantly in Q3 (and Q4) as priority is given to domestic requirements. Shipments to port(and port stocks) have been reported to be shrinking. We have not assumed that strict, formal export restrictions will be imposed (e.g. via an export tax and/or export window), though this remains a possibility.

0.0

1.0

2.0

3.0

4.0

5.0

Q1 Q2 Q3 Q4

Mil Tonnes China Phosphate Exports

2019=10.1mmt 2020=9.3mmt 2021=9.8mmt

2021 H1 55% or2.1 MMT y-o-y

Source: China Customs and Mosaic

0

2

4

6

8

10

12

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes China Phosphate Exports

TSP MAP DAP Forecast Range

9.6 – 10.0

2019: 10.12020: 9.32021F: 9.8

55%

61%

67%

73%

79%

85%

91%

97%

50

55

60

65

70

75

80

85

10 11 12 13 14 15 16 17 18 19 20 21F 22F 23F 24F 25F

UtilizationMil Tonnes Global Phosphate ShipmentsDAP/MAP/NPS/TSP

Actual/Estimates Mosaic Forecast Ranges

CRU - April 2021 Capacity Utilization

Phosphate Outlook: Even a modest demand growth forecast is expected to offset new supply

17

• We expect an increase in 2021 capacity utilization and expect the industry to hold relatively stable at this historically elevated rate unless additional new projects are announced/commissioned later in the forecast period.

Source: IFA, CRU and Mosaic

~2.2% CAGR ~1.7% CAGR

* NPS products included in this analysis are those with a combined N and P2O5 nutrient content of 45 units or greater.

Potash: Prices surged quickly at the end of Q2 in response to a sharp tightening of market conditions

18

*weekly average reported spot pricing for prompt deliveryData July 29, 2021

• Cornbelt granular prices are already up over $300/mt since January 2021.

• The tight market situation in Brazil had pushed prices up to the $670-$680 range in July, the highest level in 12 years.

• Prices in SE Asia rose rapidly to over $450/mt and products sold to small markets have recently been priced at even higher levels.

200

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700

Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21

$ per tonne


Published MOP Prices

c&f SE Asia delivered Corn Belt c&f Brazil

2021 H1 Regional Potash Roundup

19Source: FAI, India Department of Fertilizer, Genscape, China Customs, Siaesp, TDM, Mosaic

U.S. offshore imports nearly reached last year’s annual level in H1 2021. H1 imports jumped 91% or over 760kt from a year ago on very strong demand.

Despite a meaningful jump to almost 400kt in June, Indian imports during the first half of the year were down a whopping 17% or 346kt y-o-y.

5.5

3.94.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2019 2020 2021

China H1 ImportsMil Tonnes KCl

2.42.0

1.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2019 2020 2021

India H1 ImportsMil Tonnes KCl

Monthly China MOP arrivals have continued to decline after peaking in March. Nonetheless, H1 imports were up 18% or 700kt y-o-y from last year’s low level.

The pace of Brazilian MOP imports remained relatively high in Q2. H1 imports exceeded 5Mt and were up almost 9% or 405kt y-o-y.

1.00.8

1.6

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2019 2020 2021

U.S. H1 ImportsMil Tonnes KCl (offshore)

4.6 4.75.1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2019 2020 2021

Brazil H1 ImportsMil Tonnes KCl

U.S. H1 MOP imports were just slightly below the full year levels seen in the prior two years

20

• Very large spring demand and depleted inventories to start the year has prompted strong H1 import demand.

• Uncertainty around sanctions on Belarus may motivate importers to secure more product from other sources.

Source: Genscape; USDOC, Mosaic

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Q12020

Q2 Q3 Q4 Q12021

Q2

Mil Tonnes U.S. Offshore MOP Imports

OtherGermanyIsraelBelarusRussia

• Other includes Jordan

53

56

5153

6462

61

67 67

63

69

45

50

55

60

65

70

75

10 11 12 13 14 15 16 17 18 19 20 21F

Mil TonnesKCl

Global MOP Shipments

Global Potash Demand

21

Source: IFA, CRU, TFI and Mosaic

69 - 71

• After growing by 9% y-o-y (nearly 6mmt) in 2020, the anticipated moderation of demand growth in 2021 appears to be occurring, though this is also partly a function of limited supply availability.

• We maintain a narrowed forecast range for global MOP shipments in 2021 of 69-71mmt, with upward revisions in North America and SE Asia offsetting a more cautious stance on China and India.

0.5 0.50.6 0.3

1.20.9

1.40.7

0.30.9

1.1

-1.2

0.7

-1.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2020 2021F

YoY Changes of MOP Shipments(Mil Tonnes KCl)

China

India

Indonesia+MalaysiaLatin America

North America

Europe+FSU

Other

Global Potash Shipment Forecasts by Region

22

Muriate of PotashMil Tonnes KCl 2019 2020 Low

2021FHigh

2021F Comments

China 15.8 16.4 15.2 15.6

Strong ag commodity prices have boosted on farm demand, while the combination of tight supply and healthy demand continued to drive ex-port prices higher in China. MOP imports were up 18% y-o-y (from last year’s low level) and port inventories declined to ~2.3mmt by late-July. As imports are forecast to potentially drop below 8.0mmt this year due to insufficient supplier participation at the relatively low contract price agreed early in the year, we expect port inventories to draw down to quite low levels in H2, likely spurring an early negotiation for 2022 volumes at a significantly higher contract pricing level.

India 4.0 5.1 3.8 4.1We continue to expect a sizable drop of MOP imports in India this year and vessel arrivals were already down 17% during H1. It is estimated that India will need to import 1.3mmt in Q3 to meet seasonal demand, but availability remains a challenge, particularly at the current contract price. Monsoon revival, after a patchy start, has renewed sentiment for the Kharif season. MOP channel inventories continued to decline and were down 19% from a year-ago through late-July. We expect stocks to end the calendar year at a multi-year low.

Indonesia & Malaysia 3.9 4.1 4.9 5.1Preliminary trade data show that MOP imports in Indonesia and Malaysia were up over 20% y-o-y through May. CPO prices remained volatile, but at very high levels as production increases were smaller than expected and demand for both domestic and export markets stayed healthy. We are cautiously optimistic that COVID-related travel restrictions will not have significant impacts on labor and product movements in 2H of the year and have revised our forecast higher.

Other Asia 4.3 4.7 5.0 5.3 Supportive ag fundamentals and favorable weather resulted in healthy import demand, particularly in major rice-growing markets. We expect broad-based demand growth in the region (South and other Southeast Asia) to a level similar to the previous record of over 5.1mmt.

W. Europe 4.6 4.9 4.9 5.1 Our forecast for West Europe is unchanged, with modest growth expected in 2021. Untimely rains and mild temperatures had hampered the spring planting season, while industrial demand is overshadowed by the supply concerns resulting from the EU’s sanctions against Belarus.

E. Europe & FSU 5.7 5.9 6.1 6.3 Our view has not changed – we expect modest demand growth in the region.

Brazil 10.5 11.3 11.9 12.2Brazil remains the brightest spot in the global potash market. Total fertilizer shipments are now forecast to surge to a record of over 43mmt in 2021, supported by favorable farmer economics, particularly on nutrient-intensive crops like soybean, corn and sugarcane. Potash purchases have advanced quickly as H1 MOP imports were up almost 9% y-o-y and a very strong vessel lineup is projected for Q3.

Other L. America 2.5 3.1 3.1 3.3 We maintain our 2021 forecast for flat to slightly higher shipments on solid ag fundamentals, offset by higher prices potentially curbing marginal demand. Preliminary trade statistics reinforce this thesis.

North America 9.2 10.3 10.9 11.2North America offshore imports surged to ~1.6mmt in H1 of 2021, a jump of ~91% y-o-y. Strong shipments by both domestic producers and offshore suppliers prompted us to revise up our North America shipments forecast yet again – to over 11mmt this year (which would be the 2nd

highest shipments on record). The next few weeks will be critical for assessing shipments prospects in Q4 as product movement at the retailer/farmer levels will determine the need to replenish channel inventories after the Fall season.

Other 2.8 2.9 3.0 3.2 Farmer economics are also positive in Australia and grain production there is set for a second consecutive large harvest (after two years of drought). Demand in the Middle East and Africa are expected to stay relatively flat as high fertilizer prices (across N, P & K) may limit upside.

Total 63.3 69.0 69.0 71.4We continue to expect global shipments to increase at a more modest 1.5% in 2021, though this is more so a function of a lack of available supplies than a signal of weak demand. We forecast demand to range between 69-71mmt this year and that pipeline inventories in several key geographies will end 2021 lower than a year ago.

Source: IFA, CRU and Mosaic(numbers may not sum to total due to rounding)

August 2021

2021F Major Potash Market Summary

23Source: CRU and Mosaic

Elevated offshore imports were supported by strong on-farm demand in North America. Total MOP shipments could exceed 11.0mmt this year.

Growing concerns of supply availability remains a significant risk factor in India. Imports are forecast to drop to 3.9mmt and India will likely end the year with minimal channel inventories.

Strong fundamentals continue to fuel ag expansions in Brazil. We continue to expect another step-up of MOP shipments to circa 12.0mmt in 2021.

Favorable weather and elevated CPO prices underpin strong potash demand in Malaysia and Indonesia. Total MOP imports are forecast to recover to over 5.0mmt in 2021.

9.210.3 11.2

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19 20 21F

North AmericaMil Tonnes KCl

10.5 11.3 12.0

0

2

4

6

8

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12

14

19 20 21F

BrazilMil Tonnes KCl

4.0

5.1

3.9

0.0

2.0

4.0

6.0

19 20 21F

IndiaMil Tonnes KCl

1.1 1.2 1.7

2.8 2.93.3

0.0

2.0

4.0

6.0

19 20 21F

Malaysia and IndonesiaMil Tonnes KCl

Malaysia Indonesia

Projected MOP Supply/Demand ChangesMil Tonnes KCl 2020 2021F CommentsProjected Shipment Changes 5.73 1.01 Moderate demand growth forecast after big upturn in 2020.Percent Change 9.1% 1.5%

Projected Supply Changes 3.99 0.84SQM Production Adjustments 0.22 0.10 Incremental increases in 2020 and 2021 (less likely in 2022).K+S Bethune Ramp-Up 0.33 0.10 Pond production to slowly ramp up.Eurochem Usolskiy Ramp-Up 1.08 0.03 Phase 1 capacity: 2.3mmt in '20; Phase 1.1 capacity: 0.5mmt ramping from Eurochem Volgakaliy Ramp-Up 0.04 0.04 Limited test production in '20-'21; Phase 1 capacity of 2.3mmt achieved in Uralkali Production / Ramp-Ups 0.20 0.10 Incremental increases from existing sites and S-3 expansion.

Belaruskali Petrikovsky 0.15 0.45 Ramp-up of 1.5mmt mine (first trial MOP production in August '20), but ramp up seems precarious in current environment.

Other Changes 0.54 0.03 Includes ramp-up at ICL Dead Sea/Suria in '20/21; lower output from QSL.

Other Existing Utilization 1.43 0.00Currently assumes reduced MOS production from early closure of K1/K2 is offset by increased production at NTR Vanscoy.

S/D Surplus (+) / Deficit (-) -1.74 -0.17

Supply struggles appear to be the main limiting factor to 2021 shipment growth

24

The large “deficit” in 2020 was offset by drawdowns of producer inventories;

channel inventories were also believed to kept circa average levels.

The “deficit” projected in 2021 will need to be covered by continued strong

supply response from existing producers.

Potash: China and India inventories continue to fall

25

0.0

1.0

2.0

3.0

4.0

5.0

Jan Feb Mar Apr May Jul Aug Sep Oct Nov Dec

Mil Tonnes China Weekly MOP Port Inventory

Min/Max Range (16-20) 2021 2020 2019

0.0

1.0

2.0

3.0

Mar-19 Sep-19 Mar-20 Sep-20 Mar-21

Mil Tonnes India Month-end MOP Inventory

Trade Company

Source: India Department of Fertilizer, Mosaic China

Port Inventory: China MOP port inventories fell to roughly 2.3mmt in late-July, down 35% or 1.2mmt y-o-y.

Channel Inventory: total inventories in India slipped below 1.3mmt in late-July, down 23% or 368kt y-o-y.

• Demand prospects in Brazil remain very positive and MOP shipments are expected to rise to a record of over 12.0mmt in 2021.

• Brazilian H1 MOP imports reached a record high of 5.1mmt.

• With imports reaching their typical seasonal peak in Q3 (much of the volume is already committed), we project total imports to top 11.4mmt, up another 4% y-o-y from the record level of 10.9mmt in 2020.

0.0

1.0

2.0

3.0

4.0

Q1 Q2 Q3 Q4

Mil Tonnes Brazil MOP Imports

2019=10.2mmt 2020=10.9mmt 2021=11.4mmt

Brazil Potash

26Source: ANDA, Siacep and Mosaic

2021 H1 9% or405kt y-o-y

0

2

4

6

8

10

12

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes Brazil MOP Imports


11.3 – 11.6

2019: 10.22020: 10.92021F: 11.4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes India MOP Imports


0.0

0.5

1.0

1.5

2.0

Q1 Q2 Q3 Q4

Mil Tonnes India MOP Imports

2019=4.1mmt 2020=5.1mmt 2021=3.9mmt

India Potash

27

• Extremely slow imports in Q2 drag channel stocks down another ~440kt to 1.2mmt by late July (vs 1.7mmt end-March).

• The India contract price ($280/t announced in April) does not provide enough incentive to key international producers to significantly increase supply, while healthy demand and higher netbacks elsewhere are attracting more supplier attention.

• Even with a decent recovery in H2, we expect total imports to fall to circa 3.9mmt, leaving the country with very low carryout stocks by year-end.

Source: FAI, India Department of Fertilizer, Mosaic

2021 H1 17% or346kt y-o-y

3.8 – 4.1

2019: 4.12020: 5.12021F: 3.9

China Potash

28

• MOP imports exceeded expectations in H1 and were up 18% y-o-y. However, solid in-country demand continued to push port inventories lower through late July (dropping ~700kt since the beginning of January or down ~35% y-o-y).

• Firm demand and tight supply (from domestic and offshore suppliers) resulted in sharp price increases recently.

• Low imports are expected to push port inventories lower through the rest of the year.

Source: China Customs and Mosaic

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Q1 Q2 Q3 Q4

Mil Tonnes China MOP Imports

2019=9.1mmt 2020=8.8mmt 2021=8mmt

2021 H1 18% or700kt y-o-y

0

2

4

6

8

10

10 11 12 13 14 15 16 17 18 19 20 21F

Mil Tonnes China MOP Imports


7.8 – 8.2

2019: 9.12020: 8.82021F: 8.0

65%

70%

75%

80%

85%

90%

95%

100%

45

50

55

60

65

70

75

80

85

10 11 12 13 14 15 16 17 18 19 20 21F 22F 23F 24F 25F

UtilizationMil Tonnes KCl

Global MOP Shipments

Actual/Estimates Mosaic Forecast Ranges

CRU - February 2021 Capacity Utilization

Potash Outlook: New supply expected to slightly trail demand, leading to higher industry operating rates

29

• We have not changed our medium-term view.

• We continued to expect a gradual, modest increase in global capacity utilization over the next couple of years based on steady demand growth rates and continued ramp-up of existing brownfield and greenfield projects.

• Other new greenfield projects (Talitskyand potentially Jansen) may only offer meaningful tonnage well beyond 2025.

Source: IFA, CRU and Mosaic

~2.6% CAGR ~2.2% CAGR

12%13%14%15%16%17%18%19%20%21%22%23%

200225250275300325350375400425450475

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21

PercentMil Tonnes World Less China Grain and Oilseed Stocks

Stocks Percent of Use

Source: USDA

Strong economic rebound from COVID-low and tight ag fundamentals

30

• Global G&O balance sheets are snug – S:U ratio dropping to 15.2% in 2020/21 (below that seen in 2007/08).

• USDA’s forecast calls for the stocks-to-use ratio remaining low in 2021/22, even in the face of a projected ~4% jump in global harvest.

• But remember, with today’s technology, a season or two of conducive weather plus higher acreage and better input management can swing S:U quickly (as happened in 2008/09).

-4.0

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4.0

6.0

8.0

00 02 04 06 08 10 12 14 16 18 20E

% World G&O Demand vs. World Real GDP(y-o-y % change)

World GDP Growth (%) World G&O Demand Growth (%)

Source: USDA; World Bank (June 2021 forecast); Mosaic

Corn319%

Soybean9%

Wheat67%

Barley131%

Pork 8%

Beef14%

Poultry3%

-100%

0%

100%

200%

300%

400%

-2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

Chg (%)

Chg (mil tonnes)

China Ag Commodity Imports2021 H1 YTD Y-o-Y Changes

356%414%

438%301%

323%

319%

0

4

8

12

16

20

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mil Tonnes China Corn Imports(cumulative)

10-yr Range 2020 2021

2015: 4.72016: 3.22017: 2.82018: 3.52019: 4.82020: 11.3

China’s record-breaking imports across a wide range of ag commodities continues to drive ag markets

31

• China’s May/June corn imports averaged over 3.3mmt, pushing the H1 total to a record 15.3mmt (+319% y-o-y).

• China’s soybean imports slowed slightly in Q2, but H1 imports still set a record at almost 49mmt (+9% y-o-y).

• Major meat imports (Pork + Beef + Poultry) also grew at a slower pace in Q2, but H1 totals were still up 9% y-o-y.

Source: China Customs

y-o-y change

USDA: China needs more corn and soybeans

32

• Despite recent market nervousness around a slowdown in Chinese corn purchasing, we believe this is just a pause.• High domestic corn prices and a tight S/D are stimulating a supply response. Corn planting is expected to increase by over

1 million hectares and USDA forecasts Chinese corn harvest to increase by over 7mmt to 268mmt in 2021/22 (but the risk to that forecast seems asymmetric to the downside given recent weather headwinds (e.g. flooding).

• Given the estimated demand and projected supply-demand imbalance in China, the USDA expects Chinese corn and soybean imports to remain at very high levels during the 2021/22 crop year (corn: 26mmt; soybeans: 102mmt).

Source: China Customs and USDA

0

5

10

15

20

25

30

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Mil Tonnes China Cumulative Corn Imports(Marketing Year ending September)

2019/20

2020/21

USDA July Fcst

0102030405060708090

100

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Mil Tonnes China Cumulative Soybean Imports(Marketing Year ending September)

2019/20

2020/21

USDA July Fcst

26.0mmt

98.0mmt

20

25

30

35

40

45

50

600

700

800

900

1,000

1,100

1,200

Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Jan '21

Mil Gal/DayMil Gallons U.S. Weekly Fuel EthanolStocks Production 2017-19 Avg

Source: EIA

U.S. corn demand supported by recovering ethanol grind and elevated export demand

33

• Ethanol production has recently recovered to near its pre-COVID level.

• USDA projects ethanol grind to rebound to 5.05 bbu in 20/21 and 5.20 bbu in 21/22, but many analysts believe their forecast to be light.

• U.S. corn use is now expected to rebound to a record high of over 15.0 bbu by the end of this crop year. We see strong export demand (upside risk to latest USDA expectation) to continue into the 21/22 crop year and could keep corn use at a similar level next year.

• U.S. corn stocks-to-use ratio is forecast to drop to 7.2% in 2020/21, the lowest since 1995/96.

5.3 5.4 5.9 5.7 5.7

5.6 5.4 4.9 5.1 5.2

1.5 1.4 1.4 1.4 1.4

2.4 2.1 1.8 2.8 2.5

0

3

6

9

12

15

18

17/18 18/19 19/20 20/21F 21/22F

Bil Bu U.S. Corn UseFeed & Residual Ethanol Other FSI Exports

Source: USDA


Farm economics are robust on a global basis

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Ric

e

Whe

at

Lent

ils

Cot

ton

Soyb

eans

Mai

ze

Rap

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d &

Mus

tard

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India MSP Rates for Key Crops2020/21 % Change

1,500

2,500

3,500

4,500

5,500

Jan '17 Jan '18 Jan '19 Jan '20 Jan '21

Ringgits/MT Malaysian Palm OilDaily Close of Front Month Contract

Source: CRB


5.0

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60

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USD/BuReais/Bu Brazil Soybean PricesReais/Bu USD/Bu

Source: CEPEA, CRB (FX)

Source: Government of India; Ministry of Agriculture & Farmers Welfare

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12.00

2.00

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8.00


$/bu$/bu U.S. and China Corn PriceDaily Close of Front Month Contract

CME - USA (left axis)DCE - China (right axis)

Source: CME; DCE

Nearby contracts (corn/beans) have retreated, but new crop prices are still strong

35

3.0

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6.5

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Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21

$/bu Corn PriceNew Crop (Dec' 21 Contract) Nearby

9

10

11

12

13

14

15

16

17


$/bu Soybean PriceNew Crop (Nov' 21 Contract) Nearby

Source: CMEData through July 29, 2021

Need final update

4.5

5.0

5.5

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6.5

7.0

7.5


$/bu Wheat PriceNew Crop (Jul '22 Contract) Nearby

Only rather optimistic acreage and yield scenarios in the U.S. could rebuild stocks to comfortable levels in 2021

36

Source: USDA & Mosaic10-year average = average 2010/11 – 2019/20

Source: USDA & Mosaic

93.5

64.7

86.0

75.7

86.4

77.5

88.2

77.4

91.9

75.0

97.3

77.2

95.4

76.8

90.6

83.3

88.0

82.7

94.0

83.5

90.2

90.2

88.9

89.2

89.7

76.1

90.8

83.1

93-94

88-89

60

65

70

75

80

85

90

95

100Mil Acres U.S. Planted Acreage

2007/08 - 2021/22FCorn 10-year

Average 20/21F21/22F Scenarios

USDA Higher Area

High AreaLow Yield

Planted Acreage (mil acres) 91.4 90.8 92.7 94.0 94.0

Yield (bu/acre) 161.5 172.0 179.5 179.5 175.0

Use (bil bu) 13.5 14.8 14.8 14.9 14.8

Exports (bil bu) 1.8 2.7 2.5 2.6 2.5

Carryout (bil bu) 1.6 1.1 1.4 1.5 1.3

Stocks-to-use ratio 11.8% 7.2% 9.6% 10.3% 8.6%

Soybean 10-year Average 20/21F

21/22F Scenarios

USDA Higher Area

High AreaLow Yield

Planted Acreage (mil acres) 81.1 83.1 87.6 88.5 88.5

Yield (bu/acre) 46.4 50.2 50.8 50.8 49.5

Use (bil bu) 3.7 4.5 4.4 4.4 4.4

Exports (bil bu) 1.7 2.3 2.1 2.1 2.1

Carryout (mil bu) 318 135 155 238 147

Stocks-to-use ratio 8.3% 3.0% 3.5% 5.4% 3.3%

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13

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11

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09

U.S. weather watch: Corn/bean condition ratings continue to struggle; wide disparity between eastern and NW Cornbelt

37

7672

68

6564 64 65

65 64

45

55

65

75

85

May Jun Jul Aug Sep Oct Nov

% U.S. Corn Good to ExcellentWeek Ending July 25, 2021

2021 Previous Year 5 Year Avg

Source: USDA

676260

6059 59

60 58

45

55

65

75

85

Jun Jul Aug Sep Oct Nov

% U.S. Soybean Good to ExcellentWeek Ending July 25, 2021

2021 Previous Year 5 Year Avg

Source: USDA

India weather watch: After a patchy start, monsoon revival renews sentiment for Kharif

38

Source: India IMDCumulative rainfall thru July 30, 2021

Cumulative actual (thru 7/30): 438.1mmCumulative normal (1961-2010 thru 7/30): 443.3mmCumulative % departure from normal: -1%

• Uneven rains and long gap between has impacted pace of Kharif sowing (-4.7% y-o-y as of late-July).

• Widespread precipitation recently had pulled cumulative rainfall so far this season back to “normal” levels.

• Monsoon recovery is expected to boost sowing and fertilizer sales.

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Mil Tonnes Indonesia Total Palm Oil Stocks(Crude Oil and Processed Oil)

2020 2021

-25% -23%-17% -24% -23% -15%

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1.0

1.5

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2.5

3.0

3.5


Mil Tonnes Malaysia Total Palm Oil Stocks(Crude Oil and Processed Oil)

Min/Max Range (16-20) 2020 2021

y-o-y change

• Palm oil (PO) inventories in both Indonesia (thru May) and Malaysia (thru June) remained significantly lower than a year ago as recent increases in monthly output were not sufficient to rebuild stocks in any meaningful way (Indonesian palm oil stocks actually trended lower).

• Demand (especially exports) has been healthy and recent policy changes further improve export prospects.• India removed restrictions on imports of refined palm oils and reduced import taxes.• Indonesia cutting the ceiling rate for CPO export levies (on July 2).

• Indonesian domestic demand has also picked up - more than offsetting earlier declines in food and biodiesel uses.

Positive demand developments overshadow potential supply recovery in the palm oil market

39

June 2021 MoM YTD YoYCPO Output 2% -8%PO Stocks 3% -15%PO Exports 12% -9%

May 2021 MoM YTD YoYCPO Output 6% 3%PO Stocks -8% -18%PO Exports 12% 8%

Source: IPOA

Source: MPOB

Sugar prices rebound from a 12-year low to a 4-year high; remain supported by weather-related supply concerns

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20

30

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60

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Mil Tonnes World Sugar Stocks

• Global sugar stocks are forecast to decline again in 2021/22 despite a projected 3% (or 5.7mmt) increase in output worldwide.• While higher production is expected in the EU, India and Thailand, adverse weather conditions, particularly in Brazil, are negatively

impacting the sugarcane crop as well as crushing levels. • H1 2021 sugar production in Brazil’s Center-South region was down 14% y-o-y and sugar’s share of the sugarcane crush was also

lower than a year ago.

Source: USDA


8

10

12

14

16

18

20


$/cwtSugar

Daily Close of Front Month Contract

Source: NYMEX

Concerns of potential frost damage in Brazil have also spooked the coffee market

41

• USDA forecasts global coffee output in 2021/22 to decline 11.0 million bags (60kg bags) y-o-y due primarily to lower production expectations for Brazil.

• The drop in supply will significantly tighten the S/D and result in a large drop in global inventories (~20% y-o-y), as consumption is expected to continue to grow post-COVID-lockdowns, particularly in North America and Europe.

100

110

120

130

140

150

160

170

180

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Mil 60kg bags World Coffee Production

Source: USDA


75

100

125

150

175

200

225


$/cwt

Source: NYMEX

Coffee PricesDaily Close of Front Month Contract

Documents

August 2021 – Market Update · 2021. 8. 2. · then the havoc caused by cold Q1 weather, pushed refinery rates (and hence sulphur production) lower in 2020 and H1 2021, but has