Mexico Moves To Address Worsening Fertilizer Crisis Summary An increase in dollar-denominated fertilizer prices has forced Mexico’s government into crisis mode. Pemex will take emergency steps to bring down the cost of fertilizers for farmers. A subsidy would make Pemex’s new phosphate operation even less profitable. The crisis is becoming critical for phosphate in particular as Mexico deals with a 40% price increase due to dollar and raw material price appreciation. Pemex must find a less expensive and more robust source of rock phosphate. Pemex’s involvement in Odyssey’s Don Diego claim has been cited by environmental groups and makes sense given the low cost, large-scale nature of the claim. Mexico has been hit with a double whammy with respect to phosphate prices. While rock prices have increased, the dollar has appreciated against the peso. The combined effect has yielded an increase of almost 40 percent in peso-denominated phosphate prices over the last 6-12 months. Typically commodity prices adjust lower to counterbalance a strengthening dollar. This has held true with respect to almost all other traded commodities, but because phosphate is a tightly controlled commodity in which supply has recently been taken off-line, prices have bucked the trend. http://seekingalpha.com/article/3847236-mexico-moves-address-worsening-fertilizer-crisis
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