How to Invest in Phosphate: Updated 2024 Guide

Discovering how to invest in phosphate starts with understanding its main uses.

In particular, around 90 percent of phosphate is consumed by the agricultural sector. Thanks to its essential properties and the lack of a known substitute, phosphate is found in fertilizer products around the world as a way to promote plant growth. It is also used as a supplement in animal nutrition, as a food preservative and for various other chemical purposes

Dynamics of Supply and Demand in the Phosphate Sector

According to the latest report from the US Geological Survey on the phosphate industry, world phosphate rock production was 220 million metric tons (MT) in 2023, slightly lower than 228 million MT in 2022.

China was the main producer of phosphate rock last year with a production of 90 million MT. Morocco is in second place with a production of 35 million MT; the country also holds about 68 percent of global phosphate reserves. In third place for production is the United States, which produced 20 million MT of phosphate rock in 2023 from mines operating in the states of Florida, North Carolina, Idaho
and Utah.

Phosphate Investment Prospects

With the future of phosphate looking bright, some investors are wondering how to enter the space. There are certainly ways to do this, although investing in phosphate is a bit more complicated than investing in more common commodities such as gold and silver.

One way for investors to invest in phosphate is to buy shares in an exchange-traded fund that has exposure to phosphate. The VanEck Agribusiness ETF (ARCA:MOO) is an example. However, most market participants choose to invest directly in phosphate-focused companies. Here are three of the biggest manufacturers:

  • Nutrien (TSX:NTR, NYSE:NTR)
  • Mosaic (NYSE:MOS)
  • Vale (NYSE:VALE)
  • For more information on phosphate and potassium companies that have worked to advance their projects, including smaller companies with projects under development, see Phosphate Actions to Watch, ASX Agricultural Actions: 5 Large Companies and 5 TSX and TSXV Potassic Companies.

    With growing demand and a promising market outlook, investing in phosphate could be an attractive choice for investors attentive to the commodity sector.

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