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What's the TL;DR on fertilizer market? Is it a function of lack of access to Potash deposits in the US vs demand?
by boringg 5y ago
What's the TL;DR on fertilizer market? Is it a function of lack of access to Potash deposits in the US vs demand?
- kube-system 5y agoModern fertilizers are made with petroleum derived chemicals.
- danbruc 5y agoThat doesn't sound right, what plants need - primarily nitrogen, phosphorus, and potassium - is not contained in petroleum. Methane from natural gas is however used as a source of hydrogen to fixate nitrogen from the air in the form of ammonia.
- kube-system 5y agoSulphur and Ammonia are made from oil and natural gas. https://en.wikipedia.org/wiki/Ammonia_production#Modern_ammonia-producing_plants https://en.wikipedia.org/wiki/Ammonia_production#Modern_ammo... https://en.wikipedia.org/wiki/Sulfur#Production https://en.wikipedia.org/wiki/Sulfur#Production
- cdiamand 5y agoMy understanding is that there are three popular types of fertilizer and all three require materials (phosphate, nitrogen, potash) that currently in a shortage. Much of the potash of the world is in Belarus and Russia. Nitrogen fertilizer requires liquid natural gas, of which the price is surging. Phosphate based fertilizers are currently under export ban by China.
- rowanajmarshall 5y agoThere's a few different reason: * Ukraine and Russia are collectively the world's largest producer of potash * Nitrogen fertilisers use natural gas in their production, which has skyrocketed in price * China has banned or heavily restricted the export of fertiliser and fertiliser components over local supply fears Put that together with the effective removal of the world's largest exporter of wheat (Russia) and the 5th largest exporter of wheat (Ukraine) from world supply, and food prices are gonna get nasty. Moreso in countries that tend to import Russian/Ukrainian wheat e.g. Egypt, Turkey, Bangladesh
- dghughes 5y agoPotashCorp here in Canada was pretty big not sure if it still is. A large part of global supply of potash came from the province of Saskatchewan.
- rowanajmarshall 5y agoStill is, Canada produces about 12 million tonnes of potash a year. Ukraine and Russia each produce about 7 million tonnes.
- boringg 5y agoSo that market balance is out of whack. Probably why Nutrien is skyrocket stock wise (Potashcorp + Agrium merger)
- dharma1 5y agoNitrogen is extracted from air (which is 78% nitrogen), and combined with hydrogen to create ammonia. Doing this is doable with renewable energy, but it is significantly more expensive still vs using hydrogen from natural gas. As cost of natural gas has gone up (due to Russia not exporting as much), price of ammonia has followed.