Two of the world’s top fertilizer producers say they expect the crop-nutrient price surge will continue in coming weeks.
Nutrien (TSX:NTR), the world’s largest crop-nutrient supplier, raised its full year guidance as it forecast strong crop prices will support fertilizer spending.
Prices for potash, a key soil nutrient rich in potassium, continue to increase driven by record demand and strong grower margins, the company said in a written statement.
Its outlook came as Mosaic (NYSE:MOS), the world’s largest phosphate producer, said it too expects upward pricing momentum to continue as 90% of fourth quarter sales are committed and priced, with some customers requesting commitments as far forward as the second quarter of 2022.
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.
The price surge is stoking fears that 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 the current food inflation that’s being seen around the world.
Green Market’s North American fertilizer price index rose 0.4% at the end of last week to $1,017.87 U.S. per short ton, just off a record reached earlier this month.
