May 2022 - Market Update

Global Phosphate Shipment Forecasts by RegionMay 2022DAP/MAP/NPS*/TSPMil TonnesChinaIndiaOther : IFA, CRU and Mosaic(regional figures may not sum to total due to rounding)18.4Our forecast is unchanged – calling for a recovery in domestic shipments after the decline in 2021. Domestic availability is supported bythe CIQ export restrictions that have been in place since October 2021, while domestic production this year has been on par with yearago levels after recovering from the slower production pace in Q4. There remains a clear push to boost domestic agricultural production,and despite higher phosphate fertilizer prices – though nowhere near the extent of increases seen internationally – early indications showa strong domestic pull.10.6We have left our forecast little-changed and have growing confidence that our moderate recovery in shipments is likely to be realizedgiven the positive announcement on subsidy in late-April. The new DAP subsidy of 50,000 rupees (up from 33,000) provided a muchneeded lift to importer economics. With India cfr pricing still trading below other benchmarks, the MRP may need to be increased to makefurther imports workable, but with solid grower economics and forecasts for a normal monsoon, we believe that a modest increase to retailprices will not curb demand.9.7We have again pared back our demand forecast modestly in the face of higher prices and reduced availability. Those countries withexport-oriented ag sectors (e.g. Australia) are expected to see solid demand, but offset by reduced consumption in countries withdomestic-consumption-focused ag production, where fertilizer affordability and supply limitations (i.e. China export restrictions) areheadwinds.10.2We have made a sizable downward revision to our shipment forecast due to higher 2021 carryover inventory than previously estimatedand the belief that distributors will be targeting much thinner carryover stocks by the end of 2022. In addition, weaker grower economicsrelative to the very profitable prior two seasons and weather concerns are expected to lower overall fertilizer demand, includingphosphates. Q1 phosphate imports were down about 200kt y-o-y.While grower economics continue to look very solid despite sharply higher input prices, we have trimmed our forecast modestly to reflectour belief that there was a meaningful amount of pull-forward demand during the fall season, due to higher prices resulting in somegrowers with above average soil P levels taking the opportunity to trim application rates this year, and a later spring and delayed fieldworkresulting in some missed applications. In addition, lower imports – Q1 imports down about 700,000 tonnes y-o-y – will act to suppressshipments as well. This will also contribute to what we expect will be low inventory levels throughout 2022.North America9.611.09.710.1Europe and FSU7.17.16.87.1Reduced availability of Russian and Lithuanian supplies along with elevated prices has resulted in our trimming European demandmoderately from our last forecast. Partly offsetting this is continued expansion of FSU shipments – e.g. early reports of 5% demandgrowth in Russia.Other9.49.38.49.1Similar to the revisions made to Other Asia/Oceania, we have reduced our forecast for this geography. This is primarily a function ofelevated phosphate fertilizer prices weakening affordability in ag markets within this region that are not export-oriented, particularly in subSaharan Africa and some parts of Latin America.75.0We have lowered our forecast by 2mmt at each end of the range to account for lower expected supply – including lower production inRussia and Lithuania – and demand rationalization necessary to balance the market. Despite higher phosphate prices, grower economicsin the major agricultural production markets remain supportive to demand. Our point estimate has also been revised lower by 2mmt to73.7mmt, a decline of 2.5% y-o-y.Total75.375.872.0* NPS products included in this analysis are NP and NPS products with a combined N and P 2O5 nutrient content of 45 units or greater.11

China Phosphate ExportsGlobal supply interruptions are set to continue with reduced China phosphate exportsChina DAP/MAP/TSP ExportsOctober - MarchMil Tonnes5.04.54.03.02.52.01.00.03-yr AverageSource: China Customs, Mosaic2021-2212

Potash PricesPotash prices surged on supply disruptions from Belarus and RussiaPotash Prices /MTPublished Spot Prices1,4001,200Brazil (c&f)SE Asia (c&f)NOLA (fob)Cornbelt (delivered)1,000 Record-high prices in Brazil in the faceof supply uncertainly.800 The U.S. market continues to trade ata discount to Brazil. Prices in SE Asia are catching up withsome reports of 1000/MT beingachieved in the rces: Argus, CRU, Green Markets; Data through April 28, 202213

Global Potash DemandLack of supply now anticipated to significantly constrain demandMil TonnesKClGlobal MOP Shipments75 Our revised forecast for 2022 calls fora 11% decline in the base case and arange of 61-65 mmt. This is primarily driven by constrainedsupply from Belarus, as well asRussia, resulting in lower availability. We continue to expect low pipelineinventory levels throughout 2022.7061 - 65656055504510111213141516171819202122FSource: IFA, CRU, TFI and Mosaic14

Global Potash Shipment Forecasts by RegionMay 2022Muriate of PotashMil Tonnes ndia5.13.12.9CommentsSource: IFA, CRU and Mosaic(numbers may not sum to total due to rounding)China’s MOP imports dropped 19% y-o-y in Q1 2022. The withdrawal Belarussian exports (which accounts for almost 23% of totalChinese imports last year) beyond Q1 and the lower pricing achievable by suppliers relative to other markets are expected to seriouslyconstrain supply this year. We have lowered our forecast for China and now project a moderate decline of total shipments in 2022.3.2We lowered our forecast again, though this time predicated upon reduced supplier availability. The increased MOP subsidy (from 6,100 to 15,200 rupees) significantly improves importer margins based on the 590/t cfr contracted price. However, India’s ability toattract more than contractual volumes remains bleak given the significant discount to spot pricing and the expected drop in exports fromBelarus. Inventories (down 49% y-o-y end-Mar) are expected to persist at low levels. MOP imports were down 14% y-o-y in Q1.Indonesia & Malaysia4.36.04.44.9CPO prices moved up another RM400 since our last update due to a further tightening of global vegetable oil market. The expectationof higher production (due to the relaxing of MCO and improving labor supply) and the abrupt ban of palm oil exports announced in Aprilhave kept the market volatile, though this does provide a very favorable potash demand environment. Despite this, we have reviseddown the import forecast as we perceive reduced global availability becoming a bigger limiting factor on the outlook for the region.Other Asia5.35.44.14.4Our 2022 forecast is revised down to slightly over 4.0mmt in 2022. Imports were off to a slow start with shipments to major markets inthe region either flat or down through February versus a year ago. Constrained supply is expected to keep imports from rebounding.W. Europe5.05.44.34.5We have lowered our forecast in response to supply disruption as well as EU sanctions on Belarus and quotas for imports from Russia.E. Europe & FSU5.96.06.06.4The FSU could become the only growth market in 2022 in the face of still-healthy farm economics and protective domestic ag policies.A surge of purchases pushed MOP imports to a record-high of 3mmt in Q1. High ag input costs and the expectation of lower importavailability, however, have dampened our view on overall demand prospects and total fertilizer shipments are now forecast to decline 4% in 2022. We now forecast MOP shipments to drop by 1.0mmt from last year’s record level, but stocks should end the year lowerthan levels seen in the past few years.BrazilOther L. AmericaNorth Other3.03.52.62.8Total70.171.461.065.0Shipments in the rest of Latin America look to decline due to challenging farm economics and very constrained supply availability.We see decent on-farm demand for fertilizers so far this spring in North America and generally low channel inventory levels persistingdue to supply constraints (i.e. logistics issues and lower imports). North American MOP imports were off 40% y-o-y in Q1 asshipments from Belarus and Russia plummeted. We expect imports could drop to circa 1.0mmt this year (versus a record 2.5mmt lastyear) and total shipments to retreat to be slightly lower than in 2020.We continue to expect lower shipments in this region due to affordability concerns, most notably in Africa.We lowered our 2022 forecast by more than 6.0mmt to a point estimate of 63mmt, down 11% from 2021. This is primarily driven byconstrained supply from Belarus, as well as Russia, resulting in lower availability in almost all markets. The plunge in shipments is alsoexpected to prevent any meaningful rebuild of the already low global pipeline this year and provides a demand tailwind in future years.15

Published Spot Prices DAP, NOLA DAP, India MAP, NOLA MAP, Brazil 150 250 350 450 550 650 750 850 950 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21 /MT High-Analysis Phosphate Global Net Price Calculated from Published Weekly Spot Prices Solid demand, supply disruptions, and higher costs drove prices higher in Q1, now stabilizing