Fertilizer stocks soar over Ukraine worries

Nutrien’s share prices are up 14 per cent since last week amid market worries that the war in Ukraine could exacerbate a global supply shortage.

The Canadian company that is the largest fertilizer producer in the world is watching its stock price soar this week amid market worries that the war in Ukraine could exacerbate a global supply shortage.

Shares in Saskatoon-headquartered Nutrien Ltd., which was created in 2018 as a result of the merger between PotashCorp of Saskatchewan and Calgary-based Agrium Inc., were trading at $108.47 on the Toronto Stock Exchange Tuesday morning, up 14 per cent since last week, when Russia invaded Ukraine.

Nutrien shares have climbed 55 per cent year-over-year, as global demand for fertilizer already exceeded supply prior to this week’s geopolitical crisis. Now markets are jittery the supply shortage could get worse, because Russia and Ukraine are major fertilizer-producing countries.

“There’s a good chance that sanctions by western countries on Russia are going to impact trade,” said Matt Arnold, financial analyst with Edward Jones.

“If that’s the case, with Russia being a major exporter of many types of fertilizer, that’s just going to make global supplies that much tighter.”

Nutrien isn’t the only fertilizer producer making gains this week. The Mosaic Company — which is based in Tampa, Fla., but owns two potash mines in Saskatchewan — has seen its share price climb as have other global producers, such as Illinois-based CF Industries Holdings Inc.

But Nutrien is significant not just as a Canadian company, but also because of its sheer size. The company is the world’s largest potash producer with over 20 million tonnes of capacity at six potash mines in Saskatchewan. It also has two large phosphate mines in the U.S., and is the world’s third-largest producer of nitrogen. (Potash, phosphate and nitrogen are the three main plant nutrients used in commercial fertilizer.)

Nutrien declined an interview request, but company spokeswoman Megan Fielding said in an emailed statement last week that the company increased its potash production by almost one million tonnes in 2021 in response to market demand, and will increase production of both potash and nitrogen in 2022.