Fertilizer Makers Gain on Analyst Optimism
Source: Associated Press (6/1/11)
"Analysts see a further strengthening of the agriculture industry and strong crop prices."
Shares of fertilizer makers rose Tuesday as Citigroup upgraded its recommendations for top producers to "Buy" from "Hold."
Citi analysts see a further strengthening of the agriculture industry and strong crop prices amid delays in planting of crops like corn in the U.S. Food prices have been rising swiftly as bad weather crimps supply and a growing middle class in developing nations consumes more. The continuing strong dynamics of agriculture have been boosting fertilizer prices.
Analyst P.J. Juvekar cited in a note three main factors for the upgrade: tariffs in China and electricity shortages that could crimp that country's exports of diammonium phosphate, or DAP; the delayed U.S. crop plantings; and the fact that new fertilizer production facilities are being built but they won't be operating until after this year.