Why Shares in Mosaic, CF Industries and Intrepid Potash Soared This Week
Shares in fertilizer and ammonia manufacturers The Mosaic Company (NYSE: MOS), CF Industries (NYSE: C.F.), and Intrepid Potash (NYSE: IPI) all rose by double digits in the week by the close of trading on Thursday. CF Industries and Mosaic increased 12.7% and 14.8%, respectively, with Intrepid Potash up a whopping 27.2%, according to data provided by S&P Global Market Intelligence.
The move comes amid growing concerns over the impact of the war in Ukraine and the policy response to it coming from European countries. In addition, two interrelated issues have sent fertilizer prices soaring, given non-European producers an advantage in the marketplace.
First, Russia and Belarus are the second- and third-largest producers of potash (fertilizer potassium) in the world, and with many countries imposing sanctions on both countries as a result of the conflict, it's created a dislocation in the market resulting in higher prices. It's a shock to the system because, as Intrepid Potash management notes in SEC filings, historically, the larger potash producers "have managed production levels to approximate world demand." As such, it doesn't take much of a change in demand, or in this case, supply, to significantly impact prices. Moreover, this is not just a European issue because the U.S. tends to buy around 7% of its potash from Belarus.
Source Fool.com
