RE:Russia Jolts Global Fertilizer Market by Seeking End to Expo Given the macro picture for potash prices, as shown in this article, plus the micro picture for Verde's expansion plans, this seems an extraordinarily dangerous short, almost suicidal. Even before the Russian invasion this was a fabulous growth opportunity, but now that the ramp up in production is being accelerated to meet what should be burgeoning demand makes the ultimate goal of 25m tonnes look feasible in a much shorter time frame. Even the journey to 10m tonnes looks achievable in 5 years from here I would have thought, which gives investors an interesting number to work with when estimating what the shares could be valued at. I really look forward to what CV has to say to shareholders about his plans post the results later this month.
I for one hope that we see potash prices fall back to sensible levels as soon as possible given this would mean the horrific situation in Ukraine will have abated, but sadly this is unlikely in the next few months at least and Russia/Belarus need to be punished as heavily as possible by way of sanctions etc. The implications for food prices globally look scary in the meantime. HOWEVER, although Russia might think it holds all the cards on the matter of oil, gas, potash and other commodities these cards have a decaying shelf life. If the Covid crisis has taught us anything it is how adaptable and responsive the world has become to change. There will be a hiatus in commodity prices for a year or two, but the world will adapt to higher oil and gas prices by way of reduced dependency plus cranking up energy supply from shale, new fields in Alaska, more supply from Saudi, and Iran coming back online (hopefully if they sign the nuclear deal), plus a return to nuclear etc. And similarly countries like Brazil will find new supplies of fertiliser from the likes of Verde. And when this dreadful war in Ukraine is over, Russia will find its original markets are gone, as no one will trust them or do business with them again for a generation or more for as long as madmen run the country. Russia's only escape route if they want to avoid decades of economic stagnation is complete and total regime change, God willing.