Fertiliser Update
With the Russian invasion of Ukraine, gas and oil prices have moved higher. At this point we do not know what sanctions Russia will see in its entirety, and if they would include sanctions on fertiliser. What we do know is that this conflict has now reduced the prospect of less expensive fertiliser for 2022.
In 2021 we have seen record high fertiliser prices, with trade disputes, imposed tariffs, supply disruptions and higher manufacturing costs. The hope was for fewer market disruptions in 2022, and the subsequent reduction in fertiliser prices. This military conflict will have a huge negative effect on global nutrient supply and the prospect of even higher prices than we have previously seen.
Russia is a major producer of Nitrogen, Phosphorous & Potash. Russia exports almost 50% of its ammonium nitrate, with most of it ending up in Europe. Consequently, Europe will suffer fertiliser shortages and price spikes. Europe is also dependent on Russia for a third of its natural gas supplies.
As for the remainder of this season, the prospect of sitting on the fence waiting for lower product values has disappeared.
We urge now to seek any remaining purchases to be made sooner, rather than later. The appetite and risk for import businesses to make large purchases and stock positions will be muted in April/May due to the uncertainty of the markets, and inventories could well be run dry in the circumstances.
Contact our Fertiliser team today: 01243 755630