Fertiliser accounts for 70% of the production costs of corn
Global fertilisers costs have skyrocketed to record highs in a perfect storm of events, including extreme weather, plant shutdowns and government sanctions.
The energy crises in Europe and China are exacerbating the impact because of the importance of coal and natural gas as feedstocks. China is also implementing new regulations aimed at exporters in an attempt to protect domestic supply.
Fertiliser more expensive than rice
In an interview now being quoted across news outlets, Pramote Charoensilp, president of the Thai Agriculturist Association, was quoted as saying “A ton of fertiliser is now more expensive than a ton of rice.” Fertiliser accounts for as much as 70% of the production cost of rice and corn. But increasing fertiliser costs will impact more than just these staples.
ADM cancels deliverable wheat receipts
On Tuesday of last week, traders in the Chicago Board of Trade received word that a big commercial grain company would cancel contracts registered for future delivery. A day later it was revealed that ADM cancelled 1,314 deliverable Kansas wheat receipts overnight. By buying back its delivery certificates for corn in the cash market, ADM signals an expectation that prices today are cheaper than they will be in the future.
