The world’s largest crop nutrient supplier, Nutrient Ltd, raised its yearly projections with robust crop prices supporting the increase in fertilizer spending. Potash, one of the key fertilizers rich in potassium and a key nutrient for the soil, saw its prices continue to increase in all the key markets. As per the Nutrient statement on Monday, the record demand and increasing growing margins firmed up the fertilizer prices.
The outlook was on the back of a statement issued by Mosaic Co, the largest phosphate producer, which expects the price momentum to march upwards. 90% of fourth-quarter sales are already priced and committed to the market even as customers request commitments as far as the second quarter of 2022.
Mosaic Ltd earlier had to adjust its third-quarter earnings that fell short of the average estimate set by market analysts. The lower sales volume in phosphate and potash resulted in shares prices going down in after-market trades.
Prices of fertilizers skyrocketed on account of increasing natural gas costs which resulted in many European plants curtailing or halting their production. The spot prices for urea, a type of nitrogen fertilizer, and potash have more than doubled in 2021, as per Green Markets, a company belonging to Bloomberg.
The surging prices have stoked fears that farmers may hold back on these fertilizers or shift more acres of land to other crops requiring fewer nutrients. Another worry is that a drop in yields could result in higher crop prices, worsening food inflation.
The North American fertilizer price index of the Green Market was $1017.87 per short ton, up by 0.4% on Friday. This was just short of the record high hit in October.
