Slide 1: The Near Term Phosphate Outlook
The Near Term Phosphate Outlook TFI Outlook Conference November 7, 2007 Tampa, FL Dr. Michael R. Rahm Vice President Market Analysis and Strategic Planning Exhibit 99
Slide 2: Safe Harbor Statement
Market Analysis & Strategic Planning 1 November 7, 2007 Safe Harbor Statement Certain statements contained herein constitute “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995. Although we believe the assumptions made in connection with th
Slide 3: Topics and Take Aways
Market Analysis & Strategic Planning 2 November 7, 2007 Topics and Take Aways Demand prospects look rock solid The supply/demand balance remains tight during 2007/08 based on our best estimates today Key swing factors point to more upside than downside risk
Slide 4: Demand Prospects Look Rock Solid
Demand Prospects Look Rock Solid
Slide 5: Global grain and oilseed stocks will fall again this year despite a record harvest
Market Analysis & Strategic Planning 4 November 7, 2007 Global grain and oilseed stocks will fall again this year despite a record harvest Global grain and oilseed stocks will decline again in 2007/08 despite higher crop prices and the large increase in planted area this year. Production is forecast
Slide 6: Demand growth is accelerating
Market Analysis & Strategic Planning 5 November 7, 2007 Demand growth is accelerating Grain Use CAGR 97-02 02-07 1.1% 2.5% World Less China Grain and Oilseed Use 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 Bil Tonnes Source: USDA Global grain and oilseed demand growth is accelerating due to
Slide 7: Extraordinary new crop prices
Market Analysis & Strategic Planning 6 November 7, 2007 Extraordinary new crop prices New Crop Wheat Prices Daily Close June 1 to May 31 3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 7.00 MM/DD $ BU 2004N 2007N 2008N 2009N Source: KCBOT New crop wheat prices for the next two years have climbed to nearly $
Slide 8: Extraordinary new crop prices
Market Analysis & Strategic Planning 7 November 7, 2007 Extraordinary new crop prices New Crop Corn Prices Daily Close July 1 to June 30 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 MM/DD $ BU 2004Z 2007Z 2008Z 2009Z 2010Z Source: CBOT New crop corn prices for the next three years have traded in
Slide 9: Extraordinary new crop prices
Market Analysis & Strategic Planning 8 November 7, 2007 Extraordinary new crop prices New Crop Soybean Prices Daily Close July 1 to June 30 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 MM/DD $ BU 2004X 2007X 2008X 2009X Source: CBOT New crop soybean prices for the next two years moved up to $9.
Slide 10: More than corn, wheat and soybeans
Market Analysis & Strategic Planning 9 November 7, 2007 More than corn, wheat and soybeans Palm Oil Future Prices Daily Close of Nearby Option RM/MT Source: Kuala Lumpur Exchange Rice Future Prices Daily Close of Nearby Option $ CWT Source: CBOT Palm oil traded at an all-time high during the last we
Slide 11: Optimistic global demand forecasts
Market Analysis & Strategic Planning 10 November 7, 2007 Optimistic global demand forecasts IFA estimates that global phosphate use increased 5.2% or more than 1.9 million tonnes P O in 2006/07. Demand is forecast to increase another 3% or 1.2 million tonnes to just more than 40 million tonnes P O i
Slide 12: Strong demand growth in Brazil and India
Market Analysis & Strategic Planning 11 November 7, 2007 Strong demand growth in Brazil and India Brazil Fertilizer Shipments MMT Source: ANDA & Mosaic India Nutrient Demand Fertilizer Year Beginning April 1 Mil Tonnes Nitrogen Phosphate Potash Source: IFA June 2007 Farm economics in India are as st
Slide 13: Impact of the weak dollar
Market Analysis & Strategic Planning 12 November 7, 2007 Impact of the weak dollar Soybean Prices Monthly Average of CBOT Daily Nearby Close 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 US$ Bu Reais Bu US$ Bu Brazilian Reais Bu MAP Prices c&f Brazil US$ MT Brazil R$ MT US$ Brazil R$ Sou
Slide 14: High and stable U.S. phosphate use this year
Market Analysis & Strategic Planning 13 November 7, 2007 High and stable U.S. phosphate use this year We estimate that U.S. phosphate use increased about 9% in 2006/07 due to the large increase in corn acreage and a recovery in application rates. U.S. demand is forecast to stay flat in 2007/08 due t
Slide 15: Slight upward trend in U.S. phosphate use
Market Analysis & Strategic Planning 14 November 7, 2007 Slight upward trend in U.S. phosphate use Small increases in acreage coupled with further increases in application rates are projected to drive up U.S. phosphate use to the 5 million ton range by 2011/12. Demand is expected to remain relativel
Slide 16: The supply/demand balance remains tight during 2007/08
The supply/demand balance remains tight during 2007/08 based on our best estimates today
Slide 17: Phosphate prices have climbed to record high levels this year
Market Analysis & Strategic Planning 16 November 7, 2007 Phosphate prices have climbed to record high levels this year DAP Prices Central Florida Rail $ ST Source: Green Markets DAP Prices NOLA Barge $ ST Source: Green Markets DAP Prices fob Tampa Vessel $ MT Source: Fertecon
Slide 18: Strong global import demand prospects
Market Analysis & Strategic Planning 17 November 7, 2007 Strong global import demand prospects World Less China Processed Phosphate Import Demand by Region MMT Asia less China L Amer Europe Oceania Other Source: Fertecon, IFA and Mosaic We estimate that processed phosphate (DAP/MAP/TSP) import deman
Slide 19: Indian import demand remains at high levels
Market Analysis & Strategic Planning 18 November 7, 2007 Indian import demand remains at high levels DAP imports are forecast to decline slightly to 2.6 million tonnes in 2007 and then increase to about 2.8 million tonnes in 2008. Indian Processed Phosphate Imports 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.
Slide 20: Latin America imports are projected to increase 28% in 2007
Market Analysis & Strategic Planning 19 November 7, 2007 Latin America imports are projected to increase 28% in 2007 Total processed phosphate import demand from Latin America is forecast to increase 28% or almost 1.5 million tonnes in 2007. Brazil will account for the bulk of the increase this year
Slide 21: Brazilian imports are forecast to increase 58% in 2007
Market Analysis & Strategic Planning 20 November 7, 2007 Brazilian imports are forecast to increase 58% in 2007 Brazilian imports are expected to increase 58% or 1.3 million tonnes to 3.6 million tonnes in 2007. That eclipses the previous peak of 3.5 million tonnes in 2004. DAP and MAP imports were
Slide 22: Argentine imports are projected to increase another 3% in 2007
Market Analysis & Strategic Planning 21 November 7, 2007 Argentine imports are projected to increase another 13% in 2007 Argentine Processed Phosphate Imports 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Source: Fertecon, IFA and Mosaic MMT MAP DAP TSP Total processed phosphate import demand from Argentina i
Slide 23: Western European imports are projected to increase about 320,000 tonnes in 2008
Market Analysis & Strategic Planning 22 November 7, 2007 Western European imports are projected to increase about 320,000 tonnes in 2008 The elimination of the set aside requirement for 2008 crops combined with high wheat and oilseed prices is expected to boost import demand about 10% or 320,000 ton
Slide 24: Aussie demand is expected to rebound from drought-impacted levels
Market Analysis & Strategic Planning 23 November 7, 2007 Aussie demand is expected to rebound from drought-impacted levels of 2006 and 2007 Australian processed phosphate imports are forecast to increase 35% this year from the drought-impacted level of 2006. Assuming more normal rainfall next year,
Slide 25: More exports likely required from U.S. producers in 2008
Market Analysis & Strategic Planning 24 November 7, 2007 More exports likely required from U.S. producers in 2008 Processed phosphate includes DAP, MAP and TSP Processed Phosphate Export Supply by Region MMT USA Africa & Mideast FSU Other Source: Fertecon, IFA and Mosaic U.S. processed phosphate exp
Slide 26: Moroccan processed phosphate exports are forecast to increase significantly
Market Analysis & Strategic Planning 25 November 7, 2007 Moroccan processed phosphate exports are forecast to increase significantly Processed phosphate exports are forecast to increase about 16% in 2007 and 10% in 2008. The OCP/Fauji JV is expected to commission a 375,000 tonne P O acid plant durin
Slide 27: FSU exports are projected to continue to trend down
Market Analysis & Strategic Planning 26 November 7, 2007 But FSU exports are projected to continue to trend down due to increases in domestic use FSU rock and processed phosphate production are forecast to stay flat during the next few years. Steady growth in domestic phosphate demand – driven by hi
Slide 28: U.S. shipments are projected to increase 8%
Market Analysis & Strategic Planning 27 November 7, 2007 U.S. shipments are projected to increase 8% U.S. DAP and MAP shipments rebounded 6% to 7.1 million tons in 2006/07. However, we estimate that total phosphate use increased at least 9% last year so some demand was met by de-stocking the pipelin
Slide 29: U.S. shipments are off to a strong start
Market Analysis & Strategic Planning 28 November 7, 2007 U.S. shipments are off to a strong start U.S. phosphate demand is projected to increase another 1% in 2007/08. U.S. DAP and MAP shipments are projected to increase another 8% to 7.7 million tons in 2007/08. YTD shipments were up 45% from the l
Slide 30: A tight situation through 2007/08 based on our best estimates today
Market Analysis & Strategic Planning 29 November 7, 2007 A tight situation through 2007/08 based on our best estimates today U.S. DAP and MAP Producer Total Stocks JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN MIN MAX Range (1999/00-2004/05) 05/06 Actual 3-Yr Avg Source: TFI and Mosaic U.S. DAP an
Slide 31: Key swing factors point to more upside than downside risk
Key swing factors point to more upside than downside risk
Slide 32: 1. Chinese exports are the wild card
Market Analysis & Strategic Planning 31 November 7, 2007 1. Chinese exports are the wild card China Processed Phosphate Exports 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Source: IFA and Mosaic MMT DAP MAP TSP Chinese processed phosphate exports are forecast to increase to 4.4 million tonnes in 200
Slide 33: 2. Indian DAP import demand
Market Analysis & Strategic Planning 32 November 7, 2007 2. Indian DAP import demand DAP demand is expected to remain strong due to highly favorable farm economics. Indian DAP use is projected to increase to 7.2 million tonnes in 2007/08, up from 6.9 million in 2006/07. Imports have accounted for al
Slide 34: 3. Grain prices and nutrient demand
Market Analysis & Strategic Planning 33 November 7, 2007 3. Grain prices and nutrient demand Soybean Price Daily Close of the CBOT Nearby Futures Contract $ BU Source: CBOT Rice Future Prices Daily Close of Nearby Option $ CWT Source: CBOT Palm Oil Future Prices Daily Close of Nearby Option RM/MT So
Slide 35: Topics and Take Aways
Market Analysis & Strategic Planning 34 November 7, 2007 Topics and Take Aways Demand prospects look rock solid The supply/demand balance remains tight during 2007/08 based on our best estimates today Key swing factors point to more upside than downside risk
Slide 36: The Near Term Phosphate Outlook Thank You
The Near Term Phosphate Outlook Thank You TFI Outlook Conference November 7, 2007 Tampa, FL Dr. Michael R. Rahm Vice President Market Analysis and Strategic Planning