Market Morsel: Nervous about Fert? This won’t help.
Gas is the driver of fertilizer. Hopefully, you have been reading these articles for a while and should understand that. It’s getting scary.
The gas price in Europe has taken another uptick in pricing levels. The reason continues to be Putin.
The developed world met the invasion of Ukraine by Russia with sanctions, which have started to hurt the Russian economy – although possibly not as bad as hoped.
In a terribly unsurprising move, Russia has decided to hit back where it hurts. Russia is a huge provider of natural gas to Europe. They have now switched off the pipelines and will not allow the gas to flow until sanctions are removed.
Until the pipes flow with gas, prices are likely to remain elevated. The result is that with the input price of gas so high many European producers are curtailing production.
The second chart below shows the change in the average price of Urea around the world on a week-on-week basis.
It’s going to be a long winter in Europe. I fear that fertilizer prices can maintain high levels through into 2023.
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