Fertiliser stocks in the green as potash prices fail to gain strength

Fertiliser stocks on Tuesday gained momentum as potash prices in Brazil declined. Potassium chloride, also known as Potash, is a vital nutrient that is used in crops. Over the past few years, the price of potash has been on a steady decline. A recent decline in potash prices in Brazil is expected to benefit fertiliser stocks.

As of July 31, 2024, potash prices had declined to $300.63. In April 2022 the price of potash had hit a peak of $1,202. Additionally, a decline in urea prices across key regions has provided further support for fertiliser stocks.

A recent report by BHP outlined that potash prices have been on a downward trend for over a year. The decline in prices has mainly come due to the easing of the high pricing regime and several disruptions in the supply of potash.

The Russia-Ukraine conflict was a major factor in the rise in potash prices as it disrupted the supply chain. Despite risk factors to the supply of potash arising again, the prices have not yet reacted.

However, the report stated that the global market can witness some balance as improvements take place on the demand and supply side. The demand for potash will likely benefit from the “intersection of global megatrends” which include rising populations, improvement in living standards, and changing diets.

Meanwhile, the Indian agriculture sector is expected to grow with increased demand, growing population, and government initiatives to boost the agriculture industry. With the agriculture industry poised to grow, fertiliser stocks are positioned to benefit from it.