High production capacity in key exporting countries will keep a lid on phosphate prices this year, PhosAgro said, as the Russian fertilizer group reports a return to profit.
Based on the current price ratios for fertilizers and agricultural products, PhosAgro said it expected nutrient prices "to rise from their floor" this year, as seasonal demand in the Indian sub-continent and Brazil picks up in the coming months.
But heavy supply threatens to limit any price rises, with PhosAgro highlighting "increased capacity in Morocco".
On Tuesday, Morocco's Office Cherifien de Phosphate (OCP), the world's top phosphates exporter, announced plans to raise output to 47m tonnes of phosphate rock in 2017, from around 34m tonnes in 2014.
The state-owned minor reported that net profits in the 2015 calendar year rose 58% to $826m, thanks to higher phosphate production.
OCP has sole-access to Morocco's phosphate reserves, the largest in the world.
OCP last month announced a $1.8bn investment plan in the contested region of Western Sahara.
PhosAgro also noted the "continued export potential from Chinese producers".
"After the decline in fertilizer prices… upside is limited by available supplies of Chinese product in the current environment of low demand and high stocks," said VTB, in a note on PhosAgro's results.
But Chinese supplies have eased so far this year, PhosAgro said with diammonium phosphate exports in 2016 so far down 42% year on year, and monoammonium phosphate exports down 55%.
This week Credit Suisse saw phosphate prices in US ports at $360 a tonne, up slightly from last month's lows, but still down 9% since the start of the year.
Urea prices will also "continue to be influenced by significant exports of Chinese production" PhosAgro said, as well as "the expected launch of major import-replacement capacity in the US".
Still, despite the supply pressure, PhosAgro saw fertilizer prices stabilising as seasonal demand kicks in in key markets.
"Expected favourable weather conditions and improved affordability of fertilizers following a price decrease, however, will support stable growth in seasonal import demand," PhosAgro said.
Across Latin America, import demand is seen as stable, after a sharp drop last year, which shrunk local inventories.
Argentine demand has been boosted by a change in government, PhosAgro said.
"Since the election of a new president and a new government in Argentina and the liberalisation of agricultural exports, a significant increase in imports of phosphate-based fertilizers has already been observed this year," PhosAgro said.
Demand in India has been muted this year, thanks to heavy stocks accumulated in the last year's phosphate import boom.
PhosAgro reported a net profit of 36.4bn roubles ($598m) in 2015, compared to a net loss of 13.4bn roubles a year earlier, as the weak rouble supported overseas sales.
This was the highest net profit, in dollar terms, since 2012.
PhosAgro sales were up 54% year on year, at 189.7bn roubles.
The company's shares in Moscow were up 0.5% at 2,855 roubles in afternoon deals.