Govt Urged To Intervene On High Fertiliser Prices
A local financial service, IH Securities, has implored the government to ensure the prices of fertilisers come down to enable farmers to take advantage of the rainy season and maximise production.
This comes as prices of fertilisers have sharply increased due to the current Ukraine/Russia conflict, with the two East European countries the main global producers of fertiliser.
According to market watchers, the price of a 50kg bag of fertiliser increased to an average of US$94 by the end of June 2022 compared to US$55 during the previous cropping season. Said IH Securities:
However, above-normal rainfall for the 2022/23 farming season is being forecasted which could potentially result in increased production.
High fertiliser prices coupled with decreasing commodity prices could discourage farmers.
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Assuming this plays out, we forecast increased agriculture production and potentially reduced cereal import bill.
IH securities, which offers brokerage and advisory services, noted that companies such as Hippo present investment opportunities. It added:
These are companies with the ability to exercise monopoly and price leadership. We are also attracted to companies with good management and a culture of value creation for shareholders.
Given the anticipated above-normal rainfall in the coming farming season, Hippo presents an investment opportunity.
Dairibord at current levels looks oversold, speaking to an opportunistic buy.
