Why Shares of FMC Soared in March
Shares in insecticide and herbicide producer FMC (NYSE: FMC) rose 12.2% in March, according to data provided by S&P Global Market Intelligence. The move comes in concert with a substantial increase in share prices of companies in the U.S. agriculture sector.
The conflict in Ukraine is likely to impact crop exports from Russia and Ukraine negatively. The potential lack of crop exports from those countries is pushing crop prices higher, which usually means more potential cash income for farmers. In anticipation, farmers will be required to seed more crops and spend on the herbicides and insecticides sold by companies like FMC. Therefore, the market bought the stock hoping that FMC would have a bumper year.
Also, the far-reaching impact of the conflict has several consequences that aren't immediately seen, but could be beneficial to FMC. For example, Russia is a significant exporter of fertilizer and sanctions against that country have sent fertilizer prices soaring and created potential shortages. Consequently, farmers could be plant more soybean (a crop that typically requires less fertilizer than corn or wheat). There could also be more demand for rice as a replacement for grain -- which is probably the reason the price of rice is soaring, too.
Source Fool.com
