There are more and more variables brought about by the geopolitical conflict between Russia and Ukraine.
At present, the energy market is still in shock, the grain sector has also revealed the clue of "crisis", and the fertilizer market has gone up.
Why did the price of chemical fertilizer rise sharply?
This is not entirely the cause of geopolitical conflicts. In fact, the price of fertilizer has gone up last year.
Affected by the soaring commodity prices caused by the epidemic, coupled with excessive currency, financial water release and high inflation, coal and natural gas have risen to a high level, directly raising the production cost of fertilizers.
Therefore, the price of chemical fertilizer rose sharply last year, causing market anxiety.
By the beginning of this year, the global chemical fertilizer inventory had almost bottomed out, and it was the spring ploughing season in the northern hemisphere. The increasing demand for chemical fertilizers poses the risk of tight supply in the chemical fertilizer market.
At this time, the conflict between Russia and Ukraine broke out, and a series of sanctions followed, which have involved energy, fertilizer and other fields.
Russia is the world's largest exporter of nitrogen fertilizer and the second largest supplier of potash fertilizer and phosphate fertilizer. Potash accounts for about 20% of global supply, while Russia and Belarus account for about 40% of global potash exports.
Belarus has been blocked by sanctions before, and Russia also suspended the export of chemical fertilizers to unfriendly countries last month.
This undoubtedly makes the global fertilizer market worse, and the price increase is also expected.
However, the rise in fertilizer prices has had a far-reaching impact on global food. For example, the planting intention report recently released by the US Department of Agriculture shows that the planting area of corn decreased from 93.4 million acres in the previous season to 89.5 million acres, while the planting area of soybean increased from 88.9 million imperial treasury to 9 1 10,000 acres, and the planting area of wheat also increased by 1%.
The root cause is the soaring fertilizer prices in the United States. Take Illinois for example. Last year, the price of chemical fertilizer was $504/ton, and this year it has soared to $65,438+$0.525/ton, a threefold increase.
Compared with the demand of corn for chemical fertilizer, the demand of soybean for chemical fertilizer is only 1/4 of that of corn.
Although the price of corn has risen due to geopolitical conflicts, the current price of corn futures in the United States has risen from the previous $6 to more than $7, but compared with chemical fertilizers, the risk of planting income has also increased greatly.
Therefore, the safest thing for farmers is to grow soybeans.
In fact, this is not surprising. In a survey last year, some farmers had tended to give up corn and plant soybeans, but now they have only increased this intention again.
But what we collect more is, what impact will this have on the global grain market pattern?
First, corn prices may continue to fluctuate at a high level.
Corn is the most widely used grain in the world, especially in the fields of feed and biofuel.
Under the influence of the decrease of Ukrainian corn exports, the decrease of global corn supply has become a high probability event, and the decrease of corn planting area in the United States will undoubtedly further aggravate this supply concern.
On the other hand, the demand for corn is also increasing.
In addition to the huge feed, the demand for biofuels from corn in the United States has been increasing.
Not long ago, the United States announced that it would release about 1 10,000 barrels of oil reserves every day in the next few months to ease the pressure on oil supply. At the same time, it is reported that the United States is considering temporarily lifting the summer sales restrictions of high ethanol blended gasoline to reduce the fuel consumption cost in the United States.
We should know that under the current oil price, the cost of ethanol gasoline is much lower than that of pure gasoline, and once the consumption of ethanol gasoline increases, it will undoubtedly mean an increase in demand for corn.
With the decrease of supply and the increase of demand, the global corn price may run at a high level.
Secondly, increase soybean production or relieve some pressure.
The main supply of soybeans has been in the United States and South American countries, but this year, due to the dry weather, the soybean production in South American countries has been reduced, which has also made the soybean market turbulent, focusing on American soybeans.
On the other hand, with countries tightening their exports, such as Ukraine suspending the export of sunflower oil and Argentina raising export tariffs on soybean meal and soybeans, the global edible oil price has risen sharply.
If the sowing and growth of American beans are successful, it may alleviate some of the global oil pressure, but it needs the cooperation of the weather, so the variables are still very large.
Finally, when the prices of corn and soybean are rising, the feed price will inevitably rise again under pressure, which is another big challenge facing the aquaculture industry.
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