World's top fertilizer maker warns of tight potash supply for foreseeable future

The world's top fertilizer makers have warned that supply disruptions have thrown the fertilizer market into disarray and could extend beyond 2022
.

Fertilizer prices surged to record highs as Western sanctions on Russia and Belarus threw fertilizer supplies into disarray
.
Ken Seitz, chief executive of Canadian fertilizer giant Nutrien, said sanctions have the potential to have a more lasting impact as it takes time to rebuild the region's export capacity and buyers look for supplies from other sources
.

Nutrien is "looking at the potential to accelerate potash production," Seitz said on a conference call with analysts on May 3
.
The tight supply "could persist beyond 2022"
.

Seitz added that the isolation of Russia and Belarus from the global fertilizer trade, even temporarily, could reshape the market, increasing supply reliability to deal with uncertainty
.

Nutrien said its potash production capacity will increase by about 1 million tonnes to 15 million tonnes this year, with most of the additions taking place in the second half of the year
.
Russia and Belarus are said to account for about 40% of global potash exports
.

Another fertilizer giant, Mosaic, also expects the potash market to remain tight for the foreseeable future.

"Maybe it's going to be a two-year problem, and even then, the gap will take two to four years to catch up," Legg Mason CEO Joc O'Rourke said on May 3
.
"
.

Nutrien expects global potash shipments to fall to between 60 and 65 million tonnes in 2022
.

On May 4, CF Industries, the largest nitrogen fertilizer producer in the United States, said that in the foreseeable future, the global nitrogen fertilizer market will remain strong, with strong demand and tight supply
.

In its quarterly earnings report, CF noted that global demand for nitrogen remains high, with the rise being supported by replenishing global grain stocks
.

Low global grain stocks-to-use ratios have pushed U.
S.
crop futures prices to their highest levels in a decade
.
CF believes this will help encourage farmers to increase fertilization over the next few weeks, rather than reduce nutrient inputs
.

Global nitrogen inventories remain very tight in terms of inventories, and although producers in low-cost regions appear to be operating at high speed, global supplies remain limited, CF said
.
Factors behind the reduced supply include export restrictions in Europe and Asia
.

In addition, energy spreads remain significant in Europe and Asia compared to low-cost regions, which steepens the global nitrogen cost curve and increases arbitrage opportunities for low-cost North American producers
.

According to the data, Nutrien’s sales in the first quarter were US$7.
657 billion, a year-on-year increase of 64%; net profit was a record US$1.
385 billion, a year-on-year increase of 941%
.
Legg Mason's first-quarter net profit attributable to common shareholders of the parent company was US$1.
182 billion, a year-on-year increase of 654.
31%; operating income was US$3.
922 billion, a year-on-year increase of 70.
75%
.
CF's first-quarter net profit was $883 million, compared with $151 million a year earlier; net sales were $2.
9 billion, up from $1 billion a year ago
.