Two of the world’s top fertilizer producers expect the crop-nutrient price surge will continue.
Nutrien Ltd., the world’s largest crop-nutrient supplier, raised its full year guidance Monday as it forecast strong crop prices will support fertilizer spending. Prices for potash -- a key soil nutrient rich in potassium -- continue to increase in all key markets driven by record demand and strong grower margins, the company said Monday in a statement.
Its outlook came just as Mosaic Co., the world’s largest phosphate producer, said in a statement it “expects upward pricing momentum to continue” as 90 per cent of fourth quarter sales are committed and priced, with some customers requesting commitments as far forward as second quarter of 2022. Mosaic reported third quarter adjusted earnings that missed the average analyst estimates, with lower potash and phosphate sales volumes, pushing shares lower in aftermarket trading.
Fertilizer prices have skyrocketed as soaring natural gas costs have forced some European production plants to halt or curtail production. U.S. spot prices for potash and urea, a form of nitrogen fertilizer, have more than doubled this year, according to Green Markets, a company owned by Bloomberg.
The price surge is stoking fears farmers may pull back on purchases or shift more acres into crops that require less nutrients. A drop in yields could drive crop prices higher, worsening food inflation.
Green Market’s North American fertilizer price index rose 0.4 per cent Friday to US$1,017.87 per short ton, just off a record reached earlier this month.