The world’s top fertilizer makers see supply disruptions that have thrown the market into chaos likely extending beyond 2022.
Fertilizer prices have soared to all-time highs as Russia’s invasion of Ukraine and sanctions on Belarus threw a massive chunk of the world’s supply into disarray. The sanctions have the potential to create more long-lasting impacts as it will take time to rebuild the region’s export capacity and buyers look for supplies from alternative sources, Nutrien Ltd. Chief Executive Officer Ken Seitz said.
Nutrien, the world’s biggest fertilizer company, is “looking at the potential to accelerate our ramp up of potash production,” Seitz said during a conference call with analysts on Tuesday. Disruptions “could last well beyond 2022.”
The isolation of Russia and Belarus from the worldwide crop-nutrient trade, even if it turns out to be temporary, could reshape the market and increase uncertainty about the dependability of supplies, he added.
“Could there be a change in global trade patterns as a result? We think that’s a possibility,” Seitz said during a telephone interview.
The Canadian company has already said it would boost potash production by about 1 million metric tons to 15 million this year, with most of the additional volume coming during the second half. Russia and Belarus account for about 40% of global potash production and exports, according to Nutrien.
Mosaic Co. also expects the potash market will be extremely tight for the foreseeable future.
“Maybe it will be a two-year problem and even then it will take two to four years after that for the deficit to catch up,” Chief Executive Officer Joc O’Rourke said during a conference call on Tuesday.
(By Jen Skerritt, with assistance from Zijia Song)