Section: CRUFI Comment

Argus Media’s Alistair Wallace assesses how exposed fertilizer and fertilizer raw material markets are to the conflict in Ukraine.

Ammonium nitrate (AN) is valued as a nitrogen fertilizer and mining explosive. Consequently, it is also widely traded and distributed globally. Some 20 percent of the 49 million tonnes manufactured annually is shipped around the world and stored in warehouses at various ports and inland destinations.

Are we on the verge of a fertilizer production, trade and supply crisis? Some usually sober and authoritative voices seem to think so.

2021 is turning out to be a very good year for profits and earnings. Take Nutrien and Yara International, for example, the fertilizer sector’s two biggest companies by market capitalisation.

In 2019, the EU fertilizer market was valued at around e17 billion, with France, Germany and former member state the UK together representing 40 percent of this total.

As recently as five years ago, decarbonising fertilizer production was little more than an aspiration.

Fertilizer markets are rallying to an extent not seen in almost a decade. This is primarily being driven by strong demand fundamentals, with crop prices moving to their highest point since 2013. But low pipeline inventories and supply disruptions have also played a part. In this guest editorial, CRU’s Chris Lawson explains what’s driving this rally and highlights the key supporting factors.

No one in this industry should ever need a reminder that commodity markets are cyclical. The corollary of that is – every once in a while – markets can, and will, abruptly change direction.

The late autumn gloom has darkened in recent weeks, as Europe slipped back into a lockdown that seemed as inevitable as the encroaching winter.

“There can be no life without soil, and no soil without life.” An insightful quote from Charles Kellogg, the renowned former chief of USDA’s soils bureau.