Fertilizer company Mosaic sees high ag-commodity prices continuing due to Russia-Ukraine conflict

The fertilizer and feed producer Mosaic Co. He said Monday afternoon that Russia’s invasion of Ukraine continues to raise the prices of some agricultural commodities, and the conflict also affects the supply of fertilizers amid low global stocks.

Russia and Ukraine together supply more than a quarter of the world’s wheat and barley, 16% of corn and more than three-quarters of the world’s sunflower oil, MOS Mosa,

This “supply uncertainty” continued to drive up the prices of cereals and oilseeds, and prices were already higher before the February invasion amid a 20-year low in global stock-to-use ratios. , said the company.

Related: Corn futures rise to their highest prices in almost a decade

Mosaic reported first-quarter earnings after the bell on Monday, with shares falling more than 2% after mixed results.

The Tampa, Florida-based company said it earned $ 1.18 billion, or $ 3.19 a share, in the first quarter, compared to $ 157 million, or 41 cents a share, in the first quarter. last year.

Adjusted for unique items, Mosaic earned $ 2.41 per share.

Revenue rose 71 percent to $ 3.9 billion as “stronger prices offset more than lower volumes,” Mosaic said.

Analysts polled by FactSet expected the company to report adjusted earnings of $ 2.40 with revenue of $ 4.1 billion.

Mosaic said it expects higher annual production of both potash and phosphates worldwide and a recovery in phosphate production from its U.S. operations.

“We take our responsibility to help the world grow the food it needs very seriously and are working to mitigate some of the impact of reducing global supply by maximizing production efficiently,” the company said.

Mosaic said that the conflict between Russia and Ukraine is also affecting the supply of fertilizers. Russia accounts for 20 percent of global nitrogen, phosphate and potash exports, and when combined with Belarus, 40 percent of global potash supply is at risk, Mosaic said.

“Russian exports of the three nutrients have declined since the beginning of the conflict, and sanctions against Belarus remain in place,” Mosaic said. In addition, for both potash and phosphates, supply chain limitations and COVID-19-related impacts “are only beginning to decline.”

“The disappointing rail service in North America experienced during the first quarter has improved, but is not expected to reach normal performance levels until the second half of 2022,” the company said.

This and other issues, including road and port congestion in Brazil and increased demand, “point to persistent markets for both phosphates and potash,” Mosaic said.

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