Reuters – Nutrien beat second-quarter profit estimates, fueled by soaring prices of crop nutrients that more than offset higher natural gas costs and lower sales volumes.
However, the world’s largest fertilizer producer lowered its full-year adjusted profit forecast as it expects higher natural gas costs to hurt its nitrogen business.
Nutrien is the latest company to post strong quarterly profits after sanctions on Russia and Belarus, the world’s second- and third-largest fertilizer suppliers.
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The sanctions have crimped an already tight supply of crucial crop nutrients like potash and nitrogen, and sent their prices soaring. During the reported quarter, prices approached levels not seen since the all-time highs of the 2008 food crisis.
On the other hand, high prices of natural gas, used as feedstock to make nitrogen fertilizers, threaten to take the shine off profits. Prices have jumped after sanctions on Russia dented supply.
Nutrien said it expects fertilizer demand to remain strong, as high crop prices and low grain stocks are expected to incentivize farmers to apply more plant nutrients to boost yields.
“We expect supply challenges across global energy, agriculture and fertilizer markets to persist well beyond 2022,” interim chief executive Ken Seitz said in a statement.
The comment echoes those of rivals CF Industries and Mosaic, which also posted higher quarterly profits.
