As markets continue to stabilize due to the effects of the ongoing Ukrainian-Russian War, investors might consider fertilizer stocks. Essentially, amid all of this, and the potential for global sanctions to impact Russian exports, fertilizer stocks could be a worthwhile purchase. Overall, companies are seeing a prolonged interruption of the world’s fertilizer supplies due to the ongoing Ukrainian-Russian war.
Markets are nervous now that the worldwide shortages may worsen, as Russia and Ukraine are the central fertilizer-producing countries. Consequently, since Ukraine-Russia is one of the largest fertilizer producers worldwide, there will be apparent cause for worry. Moreover, the decision to halt fertilizer exports from Russia, a leading global producer of nitrogen and potash, has fuelled fears that there will be global shortages of these crucial crop inputs.
The Best Fertilizer Stocks for Canadians
As the war in Ukraine further squeezes the crop-nutrient supply chain, agricultural companies are hoping to capitalize on rising commodity prices. Inflation, war, and trends in agricultural markets are increasing demand and driving up the costs of fertilizer and crops. While several factors are driving up food prices, the tightening fertilizer market is the leading contributor.
Urea fertilizer futures prices increased 32% since Feb. 24, and diammonium phosphate futures rose 13%. As a result, the company’s stock has skyrocketed over the last several months, while fertilizer prices have increased. As potash and other fertilizer prices continue to grow amid the ongoing conflict between Russia and Ukraine, one might expect to see the company’s stock continue its skyrocketing price.
The Canadian firm, the largest fertilizer producer in the world, has seen its share price rise dramatically this week as markets fret over a Ukrainian war that may deepen global shortages. Fertilizer prices are rising around the globe because supply is tightening due to the continued sanctions against Russia and Belarus. Amid Western sanctions and a trade embargo against Russia, a top global exporter of fertilizer, the price of fertilizer has skyrocketed in the past month.
Fertilizer prices have been rising crazy high since January, partly due to Russia’s incursion into Ukraine but also because of weather, supply chain disruptions, and plant technology difficulties. Since February, the rising prices of potash and blended fertilizers are edging higher. When we look at the above graph showing a massive spike for fertilizers, it provides a starker picture as to why our stock picks are focused on the sector. Intrepid Potash (IPI) looks to increase production; companies such as MOS, IPI, and our upcoming stock pick, CF, are breaking records in the fertilizer sector.
Fertilizers and farm chemicals are taking advantage of the current market environment, so we are spotlighting another potash producer making headlines. Given Intrepid Potash’s vast operations, the stock IPI may be the right pick for investors looking to get on the fertilizer stock bandwagon right now. In addition, as demand for crop nutrients increases to address the harvest shortfalls caused by geopolitical concerns in Europe, fertilizer stocks such as Intrepid Potash (IPI) will increase.
While fertilizer stocks will profit, they will also face challenges in a significant shortage of potash, with Belarus struggling to get any on the market. For the most part, the stock market in fertilizer stocks is in the spotlight today due to concerns about global supply. While the fertilizer industry is cyclical, the companies below are the market leaders continuing to grow their positions.
CF Industries Holdings Inc.
Fertilizer stocks are among the top performers this year, as companies have benefitted from the hefty prices of ingredients used in growing crops. As the strength of the agriculture market continues to grow, combined with the supply constraints on fertilizer creating an increase in the prices of nutrients, fertilizer stocks will continue to profit, as we see also with our next pick, CF Industries Holdings, Inc. Fears led to the recent fertilizer price rally, which may help shares in some top fertilizer and potash stocks continue their rise on the TSX.
which is headquartered in Tampa, Fla., but has two potash mines in Saskatchewan — has seen its stock prices rise, as have those of other producers around the world, like Illinois-based CF Industries Holdings Inc. The top three U.S.-listed fertilizer producers, Mosaic MOS, -0.68%, CF Industries CF, -1.69% and Nutrien NTR, -2.48%), are all posting significant gains this year, led by Mosaic MOS, -0.68%, CF Industries CF, -1.69%, and Nutrien NTR, -24.48%. Mosaic produces all three fertilizers;
Nutrien NTR is the largest producer of potash in the world and the third largest of nitrogen, and CF Industries CF produces only nitrogen. Mosaic is a leading producer of Potash (along with Nutrien) and Phosphate, the two most crucial crop nutrients.
As a leading U.S. producer of muriate of potash (MOP) or potassium chloride, Intrepid plays a crucial role in the fertilizer industry. In addition to being the world’s leading bromine producer (used in agricultural chemicals, pharmaceuticals, and chemical intermediates), Israel-based ICL Group (ICL) is one of the largest producers of potash worldwide of the leading suppliers of phosphates and specialty fertilizers. Like other companies discussed here, ICL is expected to profit from sanctions against Russian fertilizer exports and soaring prices for potassium and phosphorus.
With gas prices rising sharply throughout Europe, nitrogen is growing, so there is plenty of time to take advantage of the price movements related to fertilizers and farm chemicals such as nitrogen and potash. Add in a sharp increase in the price of fertilizers because of rising natural gas prices, a tight global supply (as close as we have ever seen, according to one large producer), transport bottlenecks, and suddenly a once-stodgy fertilizer industry is a scorching hot one. Furthermore, the Canadian fertilizer giant added that the ongoing Potash Deficit Crisis, and its international reaction, have, and likely will, continue to profoundly impact crop nutrition markets (supply and prices) and the world economy.