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Could potential fertiliser restrictions hit ASX potash stocks?

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Could potential fertiliser restrictions hit ASX potash stocks?

Hi Guys, Dutch farmers are protesting and it appears one of the reasons are restriction be placed on the use of fertilisers due to climate change targets. Does this include potash and if it does will this have a negative effect on companies that supply potash? Kind regards Tony

Answer

Hi Tony,

Dutch farmers have been protesting this week against government plans which could require them to use less fertilizer and reduce their livestock numbers, clearly these actions would have a devastating impact on the profitability of their businesses. This proactive European government wants to reduce emissions of nitrogen oxide and ammonia, which are produced by livestock, by the end of the decade.

We find it extremely hard to see how these almost big brother / idealistic tactics could possibly be viable in todays inflationary world:

  • Food prices are already soaring creating levels of inflation which are sending interest rates soaring threatening an imminent recession in the process.

MM cannot see this situation becoming an issue for Australian potash companies, the economics simply don’t add up unless the government wants the population to go on a financially forced diet!

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