The war in Ukraine has disrupted shipments of fertilizer and foodstuffs, plunging millions of people into hunger, threatening to depress future harvests and challenging companies to adapt to a new commercial landscape.
has disrupted shipments of fertilizer and foodstuffs, plunging millions of people into hunger in some of the poorest countries on Earth, threatening to depress future harvests and challenging companies such as CF Industries to adapt to a new commercial landscape.“There is a lot of tension in the market … It has really wreaked havoc in the fertilizer market,” said P.J. Juvekar, a Citigroup stock analyst. “The fertilizer business has fundamentally changed.
The war alone did not remake the global trade in chemicals and minerals that help farmers produce more food. But the European conflict intensified trends that were underway before the guns began blazing, such as increased hoarding by major producing nations likeand sharp jumps in the price of natural gas, the main fuel for the type of fertilizer that CF Industries produces.
“We feel very good about the position we’re sitting in today,” said Tony Will, the company’s chief executive.The volatile fertilizer market has been less kind to end users, especially in countries outside the U.S. that are more dependent upon imports, such as Mexico and Brazil.Fertilizer adds minerals to the soil, making farms healthier and more productive. Often, fertilizer can make the difference between a disappointing harvest and a profitable one.
Mumuni Baba, 36, said he could afford to plant only half of his 40 acres this year. He’s also switched some of his corn fields in Sagnarigu, northern Ghana, to soybeans and groundnut, which do not require fertilizer.Baba has been tilling the fields for a quarter century. But he has never seen a time like this.Fed's interest rate hikes may mark start of tough, new economic climate
The smaller harvests of corn, wheat, rice and soybeans that are likely to result from reduced fertilizer use would represent enough food to feed 92 million people for one year, according to Gro Intelligence, which this month introduced“The fertilizer crisis is just beginning,” said Sara Menker, Gro’s CEO. “This is going to be a multiyear crisis. It’s not one-and-done.”Sprawling across 1,400 acres, the CF Industries complex here is a warren of pipes, furnaces, cooling towers and storage chambers.
What determines CF Industries’ fortunes is the difference between the price of natural gas here and in Europe. So even as U.S. natural gas prices rose, the increase was dwarfed by the enormous jumps in Europe, which were fueled by fallout from the war.
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