Our old pal, the nitrogen atom.*
From ZeroHedge, March 24:
The fertilizer crisis appears to be worsening just as the Northern Hemisphere planting season, in some areas, is about to begin, with top ammonium nitrate supplier Russia announcing on Tuesday via state media that exports of the critical crop nutrient will be halted.
Russia's state-run news agency TASS said Russia will suspend ammonium nitrate exports from March 21 through April 21. The report cited a statement from the Agriculture Ministry.
The temporary restriction is intended to secure domestic fertilizer supplies during the spring planting season. Exports made under intergovernmental agreements are exempt.
Russia is the world's largest producer of ammonium nitrate. In 2024, the country produced about 12 million tons, roughly 47% of the global output of the plant nutrient. It was also the largest exporter at about 2.7 million tons, around 37% of global export volume and 40% of export value.
Export disruptions of the critical crop nutrient can hit import-dependent buyers hard, especially in markets such as Brazil, Canada, India, Peru, and Ukraine.
Russia's temporary export comes at the worst possible timing as the Northern Hemisphere planting season begins in some regions.
The risk now is that, as the Middle East conflict enters its fourth week, a global energy shock is also spreading to fertlizer markets and may only suggest a delayed food price shock later this year.
"The speed of the move [energy shock] pushed volatility sharply higher, with energy once again becoming the primary transmission channel for geopolitical risk into broader macro pricing," UBS analyst Claudio Martucci warned clients earlier this month.
Claudio pointed out, "Agricultural markets reacted more indirectly to the energy shock via higher fertilizer costs, and higher input and biofuel costs lifted soybean oil to two-year highs, while wheat experienced elevated volatility and some profit-taking late in the week despite an otherwise supportive commodity backdrop."
Last week, former central banker advisor Alexandra Prokopenko warned on X that the near-shutdown of the Strait of Hormuz has triggered an energy shock that risks morphing into a "slower, more consequential story": fertilizers.
"A near-shutdown of the Strait of Hormuz is triggering a supply shock that will show up in food prices 6–9 months from now," Prokopenko wrote on X, adding, "Putin's gains here may be more long-term than simply lining his pockets with petrodollars."....
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.... Bloomberg macro strategist Simon White recently warned, "But food prices are likely to be as troublesome for second-round inflationary effects. Less well known is that the shock to food prices was worse than the oil price shocks of the 1970s, following the Arab oil embargo and the Iranian revolution. Food inflation in the US was already rising before both shocks, and contributed more to headline CPI than energy through almost all of the 70s."
Prokopenko pointed out, "Consequences already material. Urea up 25-30% since Feb. 28. Gulf producers have declared force majeure on contracts to South America and Asia. ~1 million metric tons of fertilizer physically stranded in the Gulf. Force majeure means contracts are legally severed, not delayed. Buyers must find alternatives now."....
....MUCH MORE
The analysts should be aware of "The Great Grain Robbery" in late summer 1972. If you look at the chart immediately above. that is when food prices began to spike and were actually coming down by the time oil prices quadrupled during/after the 1973 oil embargo.
Since I have been, and will be, going on about ammonia as a carrier for hydrogen
NH3 - ammonia - three hydrogens attached to a nitrogen:
Credit: This Condensed Life
about fertilizer and guano, about Yara and Norsk Hydro and Birkeland and explosives, I thought it time to add another post to our nitrogen mini-library....
The outro has these backlinks:
Previously on our friend, nitrogen:
"How Making One Chemical Created the Modern World"
"Can We Grow One of the World's Largest Food Crops Without Fertilizer?"
The Adventures of a Nitrogen Atom
This Could Be A Big Deal: Norway's Yara and the Australian Nitrogen Economy
Shipping: "UK Department of Transport recommends launch of ammonia / hydrogen powered vessels within 5-15 years"
Ammonia, it's what everyone is talking about.
And if your crowd isn't, you'll be the best-informed next-gen energy storage/transport-medium connoisseur at the Thursday afternoon salon!
The $100M Synthetic Biology Bet From Bayer and Ginko Bioworks (YAR:Oslo; CF)
"Saudi Arabia Sends Blue Ammonia to Japan in World-First Shipment"
Nitrogen Upgraded, Potash Target Lowered; Ununquadium Decayed (AGU, CF; TRA; POT)
That Time A Dozen Norwegians Stopped the Nazis From Developing the Atom Bomb and Possibly Saved Europe
Many more links have been posted over the ensuing half-decade and are accessible via the search sorted by date (reverse chronological order):
https://climateerinvest.blogspot.com/search?q=nitrogen&max-results=20&by-date=true
