Securities companies keen on fertilizer stocks

Fertilizer price increases have greatly benefited fertilizer companies, and many securities companies have therefore raised the valuation of fertilizer stocks. The current global fertilizer price is up 64.3 per cent against the same period last year and 35.4 per cent compared to the beginning of 2021. Increases in agricultural prices and cultivation areas due to rising consumption during the pandemic is driving demand for fertilizers globally. A more important factor is that China is severely suffering from African swine fever. And a series of ammonia production plants have had to be suspended in recent times, in areas such as the Middle East, the US, Trinidad, and Australia, because the pandemic has cut fertilizer output by at least 150,000-300,000 tonnes per month.
Supply from China, which accounts for 34 per cent of total capacity and 10 per cent of Vietnam’s urea imports and exports in 2019, has also fallen since the end of 2020 due to a lack of natural gas for production and a downturn in imported coal output due to the trade war between China and Australia.
The increase in fertilizer prices is also due to rising input costs. The price of input materials for urea production (including natural gas and coal) has increased significantly, reaching an historic peak in early 2021. The World Bank’s gas price index has increased by 133.2 per cent compared to the same period last year while Australia’s increased 103.9 per cent.