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Nutrien‘s 2023 Market Outlook: Expect structural supply issues to persist and demand for crop inputs to increaseqrcode

Mar. 22, 2023

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Mar. 22, 2023

Nutrien Ltd
Canada  Canada

Agriculture and Retail

Agricultural fundamentals remain historically strong and are supported by the lowest global grain stocks-to-use ratio in over 25 years. Nutrien expects that Ukrainian crop production and exports will continue to be constrained by the impact of the war with Russia and it will take more than one growing season from the end of the war to alleviate the supply risk from the market. Spot prices for corn, soybeans and wheat are up 25 to 50 percent compared to the 10-year average, which we expect will support grower returns and provide an incentive to increase production in 2023.

Nutrien anticipates that US major crop acreage will increase by approximately 4 percent in 2023, assuming a more normal planting window compared to the spring of 2022. Nutrien expects corn plantings to increase from approximately 89 million acres in 2022 to between 91 to 93 million acres in 2023.

Brazilian grower economics for soybeans and corn are strong, which Nutrien expects will support another year of above-trend acreage growth in that market. Australian growers have benefited from multiple years of above-average yields and historically high crop prices, positioning them very well financially entering 2023, and Nutrien would expect another year of strong production assuming favorable weather conditions.

Nutrien Ag Solutions 2023 adjusted EBITDA guidance assumes strong demand for crop inputs in each of the markets Nutrien serves. Nutrien expects gross margins for crop nutrients and crop protection will be lower in 2023 compared to record levels achieved in 2022.



Nutrien believes potash inventories have been drawn down in Brazil and the US following a historic decline in the pace of potash shipments in the second half of 2022. Nutrien has seen improved potash demand in early 2023, however buyers continue to take a cautious approach to managing inventories that could lead to a more condensed shipment period as Nutrien approaches the primary application seasons. Nutrien’s estimate for global potash shipments in 2023 is 63 to 67 million tonnes, which is still constrained compared to the historical trend demand estimated at around 70 million tonnes.

Belarus potash shipments in 2023 are projected to be down 40 to 60 percent and Russian shipments down 15 to 30 percent compared to 2021. Nutrien anticipates the reduction in supply will be most apparent in the first quarter of 2023 compared to the same period in 2022, as both Belarusian and Russian exports were heavily weighted to early 2022 before sanctions and export restrictions were imposed.

Nutrien’s potash sales tonnes guidance of 13.8 to 14.6 million tonnes assumes increased demand in Nutrien’s key markets of North America and Brazil and continue global supply constraints in 2023. Nutrien has maintained capability to increase sales volumes to Nutrien’s previous expectation of approximately 15 million tonnes if Nutrien sees stronger demand in the market.



Global nitrogen prices have declined during the first two months of 2023 due to lower European natural gas prices and buyer deferrals. Nutrien expects European natural gas prices to be volatile throughout the year with around 30 percent of the regions’ nitrogen capacity offline at the beginning of 2023. North American gas prices remain highly competitive compared to Europe and Asia and Nutrien expects Henry Hub prices to average between $2.50 and $4.50 per MMBtu in 2023.

QQ截图20230322110104.jpgNitrogen supply constraints, including lower Russian ammonia exports, reduced European operating rates and Chinese urea export restrictions are expected to persist in 2023, all of which Nutrien expects to have an impact on pricing volatility in periods of high seasonal demand. Nutrien expects a tight US supply and demand balance ahead of the spring season due to higher corn acreage and increased nitrogen exports over the past six months.

Global economic growth is a potential risk to industrial demand in 2023. Macroeconomic pressures impacted Asian markets throughout 2022 and there is the potential that the reopening of the Chinese economy has a positive impact on economic growth in the region later in 2023, depending on the impacts of COVID-19 and related policy decisions.

Nutrien’s nitrogen sales tonnes guidance of 10.8 to 11.4 million tonnes in 2023 assumes higher operating rates at Nutrien’s North American plants and a continuation of gas curtailments in Trinidad in 2023. Nitrogen sales tonnes guidance includes 300,000 to 350,000 tonnes of projected ESN® product sales that prior to 2023 were included in the other product category.


Nutrien expects Chinese phosphate export restrictions to be in place until at least April 2023, anticipate improved demand in North America and Brazil, and the continuation of strong demand in India. Phosphate product margins are expected to be supported by lower raw material sulfur prices due to reduced operating rates and demand in China.



Source: Nutrien


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