Mosaic is currently facing a challenging business environment in agriculture and there is a continuous negative sentiment among agriculture investors that can create uncertainty in 2015. Also, agricultural commodity prices are weak.
Mosaic is also facing pricing pressure in the phosphate segment. Phosphate prices remain depressed even as costs rose for raw materials. The company has thus decided to reduce phosphate production in response to these conditions.
Moreover, the company also lowered its forecast for global phosphate shipments for both 2014 and 2015 by roughly a million tons partly due to India importing more phosphoric acid for NPK fertilizer production.
Mosaic also foresees a bumper harvest in the next season which will possibly bring prospects of lower income for growers in 2015, making them skeptic in their business.
Mosaic is also exposed to macroeconomic uncertainties and other issues such as volatility in prices for key raw materials including ammonia and sulfur, and currency exchange fluctuations (mainly Canadian dollar and Brazilian real). Unfavorable swings in costs of key inputs – ammonia and sulfur – may hurt the company’s cost structure and profitability.
http://www.zacks.com/stock/news/155521/mosaic-mos-down-to-strong-sell-time-to-dump-it
