Fertilizer producers see profits grow fast

Fertilizer producers YARA and OCI benefited greatly from the extremely high fertilizer prices in the first quarter. This more than offset the high energy costs for both companies.  

Both companies saw turnover approximately double. Yara boosted total sales by 88% to $5,9 billion in total. At OCI, sales even increased by 108% to reach $2,3 billion. The higher turnovers were achieved in the production of slightly smaller volumes. Yara cut production at some of its European plants in early March due to high gas prices.

Lightning fast profit growth
The high market prices not only led to high turnover, but more than adequately covered the increased costs. Yara's earnings grew 6.664%. While a modest net profit of $2021 million was realized in the first quarter of 14, it was $947 million for the first quarter this year. At OCI, profits increased 246% from $102 million in the first quarter of last year to $354 million in the first quarter of 2022.

Both companies are positive for the rest of the year. Raw material prices remain high, boosting demand for fertilizers. Although the total production of fertilizers worldwide may grow somewhat, the supply remains quite tight. Low stocks and problems in logistics are partly responsible for this, according to Yara. OCI also speaks of positive market conditions up to 2024. It foresees faster growth in demand than in production capacity for both 2022 and 2023.

Steve Wissink

Stef Wissink is an editor at Boerenbusiness and writes about current market developments in the dairy and pig market. He also follows Dutch and international agribusiness.

s.wissink@boerenbusiness. Nl

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