The scenario I described above is occurring all over the world. Just because we managed to bid high enough to secure almost enough inputs, much of the world just isn't capable of competing at these prices.
Here is an example from Romania:
Hungarian producer Nitrogenmuvek Zrt, which sees grain yields falling 15pc to 20pc this year in a region that includes major European exporters Romania and Poland.
Farmers have cut nutrient usage due to high prices and supply issues, at a time when dryness has also threatened crops. Fertilisers have become more expensive as a rally in natural gas – a crucial feedstock – raised costs and cut output.
None of this helps whatsoever in the short term, as technical selling continues to overwhelm any fundamentals. But in the somewhat longer timeframe, these issues are inescapable. And lower prices for the grains produced is only going to amplify the problems at a time when the market should be doing everything it can to motivate production.
Here is an example from Romania:
Hungarian producer Nitrogenmuvek Zrt, which sees grain yields falling 15pc to 20pc this year in a region that includes major European exporters Romania and Poland.
Farmers have cut nutrient usage due to high prices and supply issues, at a time when dryness has also threatened crops. Fertilisers have become more expensive as a rally in natural gas – a crucial feedstock – raised costs and cut output.
None of this helps whatsoever in the short term, as technical selling continues to overwhelm any fundamentals. But in the somewhat longer timeframe, these issues are inescapable. And lower prices for the grains produced is only going to amplify the problems at a time when the market should be doing everything it can to motivate production.
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