Joc O'Rourke
Chief Executive Officer at Mosaic
Thank you, Bruce. Today's agriculture market is tight. Food security is a major concern around the world, but crop production is constrained. Global stock-to-use ratios for grain and oilseeds remain near historic lows, which highlights that crop supply is struggling to keep up with demand. Weather conditions around the world, particularly in developing markets, have impaired production. Today, El Nino weather patterns are having an impact across Southeast Asia and Australia. The situation is being exacerbated by persistent underfertilization.
Over the last two years, we've begun to see a significant relationship between insufficient nutrient consumption and disappointing yields. And of course, key growing regions are being impacted by geopolitical flareups and all-out war, as is the case with the war in Ukraine. Over the last two years, Ukrainian grain and oilseed exports are down 32% from pre-invasion levels. It's difficult to see how other regions will be able to offset the shortfall, given poor weather and reduced fertilizer applications.
Despite reduced production levels, demand around the world remains strong. China's import of soybeans, beef and wheat are at record levels. India, which accounts for nearly 40% of global rice trade, has a limited ban on non-Basmati white rice exports and places duty on a portion of its remaining rice sales in order to ensure adequate domestic supply. Additionally, we are now seeing emerging demand from renewable diesel and sustainable aviation fuel. In the U.S., biofuels represent a quarter of soybean consumption. These dynamics mean elevated crop prices could persist through 2024 and beyond, and growers will want to maximize yields.
This brings us to the fertilizer market. The ply of potash and phosphates is being impacted by sanctions, weather disruptions and evolving producer behavior. In potash, sanctions and other disruptions continue to limit exports from the former Soviet Union. Belarus remains blocked from port access in Lithuania, forcing it to find other outlets for its shipments. Some of those exports have shipped by ports in Russia or by rail into China, though total shipments remain well below pre-sanction levels of 12 million tons. This year, we expect Belarus exports to be in the range of 8 million to 8.5 million tons, and we expect limited increases from that range in 2024.
In Canada, labor strikes, rail congestion and terminal repairs have limited the West's ability to mitigate lost FSU tons. More recently, the conflict in the Middle East, in addition to the ongoing war in Ukraine, highlight the risk of further supply disruptions. In total, global potash shipments are expected to be in the range of 64 million to 65 million tons, simply because the supply isn't there to meet additional demand, particularly in developing markets where crop supply is primarily made up of subsistence farming.
In phosphates, over the last decade, China grew to be the largest exporter of finished phosphate fertilizers, supplying about 30% of the seaborne market in 2021. But over the last 18 months, export restrictions and a shift of production away from agriculture to industrial markets has significantly reduced phosphate fertilizer exports. This year, we estimate China's exports could be 3 million to 4 million tons below the 2021 level of 11.4 million tons, or roughly 7 million to 8 million tons.
On the demand side, we are seeing strong consumption returning. We saw this play out in the spring in North America. After a slow start to the season, favorable economics and depleted soil reserves brought farmers back to the market. Our phosphate and potash shipments in North America were the highest in the last five years. This was followed by a great summer fill program and a very strong fall application season. The last three months through October were a record for Mosaic's North American potash shipments.
We saw similar dynamics play out in Brazil. Safra season fertilizer shipments ended up being very strong. For the full year, we expect total fertilizer shipments in Brazil to be 43 million to 44 million tons, the second highest total in history. With destocking of fertilizers in Brazil complete, inventories are quite low and will need to be replenished for 2024.
In India, we continue to see strong demand driving elevated imports. Phosphate inventory levels are near the low end of the most recent five-year range, which suggests shipments are going straight to the ground. Potash inventories are also very low and we are seeing indications of price acceptance that could drive higher shipments going forward.
For several quarters now, we have discussed that once volumes begin to move, prices will follow. We are now seeing available volumes move and pricing has stabilized and shown seasonal strength in many markets. These dynamics highlight the value of Mosaic's portfolio. Our business is well positioned to meet customer needs and deliver value to shareholders.
In potash, our third quarter results reflect the strong sales volumes in North America. To meet that demand and mitigate the impact of Esterhazy's planned turnaround, Colonsay was restarted at the beginning of the quarter. Looking ahead, we expect fourth quarter potash sales volumes of 2.4 million to 2.6 million tons and net back MOP prices at the mine in the range of $235 to $260 per ton. Our pricing guidance reflects a product mix shift towards overseas sales as North American fall application season winds down.
In phosphates, we recovered quickly from the impact of Hurricane Idalia and were able to restart operations in approximately three days, which really minimized the impact of the storm. Separately, we are working through the repairs at our Faustina facility in Louisiana, following a power disruption by the local utility that occurred late in the third quarter. Those repairs should be completed in the fourth quarter. We expect fourth quarter sales volumes to be in the range of 1.6 million to 1.8 million tons and DAP prices at the plant gate of $530 to $580 per ton.
Moving to Brazil, our Fertilizantes segment reported strong third quarter results. Let me emphasize that we pushed to destock high-cost inventory in the first half of 2023, and this effort was completed early in the second quarter. Our distribution business is no longer experiencing the same pressures that others are as you can see from our results this quarter. For the fourth quarter, over 90% of our sales volume is already committed and priced. With our order book and inventory position, we expect our fourth quarter distribution margin to be in the range of $40 to $50 per ton.
Our approach to capital allocation has not changed. We remain committed to investing in our business, maintaining a strong balance sheet and returning capital to shareholders. Our capex budget for 2023 is $1.3 billion to $1.4 billion. And as Bruce mentioned earlier, we expect to reduce total capital spending for 2024 by up to $200 million. Our balance sheet is strong and our commitment to return capital to shareholders remains unchanged. All excess cash will be returned through dividends and share buybacks. Year to date, we have returned nearly $900 million to shareholders through buybacks and dividends, including $150 million of repurchases in the third quarter.
Before we go to questions, let me summarize. The world needs more crop supply, and we won't get it without good fertilization. Farmers are seeing good economics and want to maximize yield with fertilizers, but supply is uncertain and channel inventories are low. Mosaic is well positioned to benefit, while continuing to deliver value to shareholders, and we are returning significant capital while still investing in the business. I look forward to watching Bruce lead Mosaic into the future.
Paul, let's move over to questions.
