Bull Market?

March 07, 2011

Last week, the FAO reported an increase in food prices for the eighth consecutive month.   Certainly current fundamentals suggest longer term prosperity in agriculture, as commodity crop prices remain strong in almost all cases.  As a result, farm incomes are healthy and crop production input providers are profitable.  The fertilizer supply chain is especially bullish.  At the recent winter TFI meeting in Phoenix, it was all smiles and high fives. 

Fertilizer prices have responded to this optimism.  The one exception is urea which has been relatively sluggish as the latest Granular Urea Basket Price indicates.  Our friends at Profercy analyze this situation insightfully in their 1 March Urea Forecast.   Our view is that if you are a buyer, urea is currently a competitive source of nitrogen.  On the other hand, speculators trying to run with the bulls in other nitrogen products could face painful consequences.

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Asian Crossroads

November 12, 2010

 This year's IFA regional conference in Hanoi seems even more productive than ever. Registered attendance was 280, with a few more hitch-hikers working the shadows. The Intercontinental Hotel was excellent, serving as a real benchmark for Vietnam's progress since IFA's last visit to Hanoi in 2002. If we were to comment on Hanoi as a destination, our only regret is the ever present smog that seems to be a trademark of progress in this region. Try as it might, the sun was never able to break through the haze and shine on our beautiful lakeside venue. The program was very interesting, holding its own against a changing conference culture within our industry. Specifically, there seems to a growing appetite even at this conference for scheduled meetings as opposed to group social and educational programs. The annual Kim Gai Soh golf tournament still has a loyal core group of supporters. We played this year at the Kings' Island Lake Course which is a great track. The jungle and water hazards that line this course are framed by ubiquitous beds of a flowering but impenetrable ground cover which can be challenging. Good thing that we are often encouraged to... stop and smell the flowers.

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A View from Shanghai

May 26, 2009

We write this post from Shanghai as an unseen morning sun rises shrouded by dense smog.   We are here for the IFA's 77th annual conference in one of China's most modern cities.  Shanghai is a showcase of China's future, with spectacular scale, architecture and planning.  It is also a showcase for a new chapter in the Industrial Revolution, seemingly unbridled growth at an astonishing pace.

As an old "Asia Hand" we are able to benchmark this remarkable progress, but we also ask ourselves...at what price?

We have been here for three days and have yet to see the sun.

An article in the 25 May 09 edition of Business Week further frames the issue:

"China's unprecedented growth in recent years has come at a terrible price.  Two-thirds of its rivers and lakes are too polluted for industrial use, let alone agriculture or drinking.  Just 1 in 100 of China's nearly 600 million city dwellers breathes air that would be considered safe in Europe.  At a time when arable land is in short supply, poisoned floodwaters have ruined many productive fields. And last year, ahead of most forecasts, China passed the U.S. to become the world's largest source of greenhouse gases."

One could argue that China's environmental policy is none of our business...but in fact, it is.  Our own politicians in Washington are at this very moment feverishly fashioning an environmental bureaucracy that would make any communist central planner proud.

There is no question that this policy will result in the outsourcing of even more of our pollution to China and to the rest of the developing world.  So again we ask the question...at what price?

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