Emerging markets planting the seeds for fertilizer growth

As food consumption increases around the world, potash companies are a good way to play the trend.

Jeffrey Stafford, CFA 20 August, 2014 | 6:00PM

Growth prospects for emerging-market diets remain robust. We expect no slowdown in absolute food consumption in the next decade compared with the prior decade. Poorer places such as India and sub-Saharan Africa drive much of the growth. Richer emerging countries such as China will shift what they eat, which can have just as meaningful implications for agriculture input producers as how much a country eats. This growth story underpins an attractive demand outlook for fertilizer, particularly potash.

Wide-moat   Potash Corp  POT remains our favourite way to play this trend. Not only does the company hold an advantage on the cost front, but PotashCorp has spare capacity that should be filled by growing demand from emerging markets.

Emerging-market food demand will remain strong over the next decade

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Jeffrey Stafford, CFA

Jeffrey Stafford, CFA  Jeffrey Stafford, CFA, is director of energy and utilities research for Morningstar.

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