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There's a few different reason: * Ukraine and Russia are collectively the world's largest producer of potash * Nitrogen fertilisers use natural gas in their p
by rowanajmarshall 5y ago
There'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.