Farmers in Peru have been rioting in the streets over sky high fertiliser prices, and in Brazil, the food bowl of Latin America, the last fertiliser deliveries from a now-sanctioned Russia are about to be received.

Less fertiliser means smaller crops, and smaller crops means higher food prices (and absolute food shortages).

Welcome to the start of the hunger games, triggered in part by Russia’s invasion of Ukraine, a European food bowl.

Fertiliser supply disruptions in Canada, China’s export ban, a pre-existing sanction on Belarus exports, and Europe’s energy crisis, meant prices for the crop nutrients were already on the tear long before the February 24 start to Russia’s invasion.

But in recognition of Russia and its satellite Belarus accounting for as much as 40% of global supply of key fertilisers, fertiliser prices have shot higher still.

A basket of fertiliser prices measured by CRU’s fertiliser index recently climbed to a record high, eclipsing the previous record set in 2008 by 8 per cent.

The need-to-feed-the-world thematic is now back with a vengeance, after having been left in the shadows in recent years while the decarbonisation thematic strutted its stuff.

While battery metals tied to the decarbonisation thematic – particularly lithium – have left all other commodities in their wake, the key fertilisers of nitrogen, phosphate and potash (potassium) are now running a close second.

That has triggered a burst of interest in ASX companies in the fertiliser space, mainly in potash and phosphate.

It is a space dominated by projects rather than production. But record fertiliser prices are likely to be a permanent feature until Russia is welcomed back into the international community, and until Europe sorts out its energy crisis.

Garimpeiro has dusted off his fertiliser files which have been in the bottom draw since the last time the sector excited in 2008.

A bunch of new entrants have arrived on the ASX since then, sporting sulphate of potash (SOP, for chloride sensitive crops like fruit and vegetables) projects based on brines from WA’s salt lakes.

Early movers have had their issues, but there is nothing like a more than doubling in prices to help put things right.

HIGHFIELD (ASX:HFR): Trading at $1.09 for a market cap of $397 million. Garimpeiro mentioned Highfield back on December 11 when it was 58c. Canaccord has a $1.56 price target on the stock as European food and nutrient security comes into sharp focus.

It has been a long road for the company to secure approvals/financing for its Muga project in northern Spain but the end is in sight, with a final investment decision likely mid-2022.

It is a low capital intensity muriate of potash project (MOP, potassium chloride for broadacre corps like wheat, corn and soy) capable of throwing off serious earnings at much lower long-term price expectations. Watch out if current prices get baked on.

SOUTH HARZ (ASX:SHP): Trading at 20c for a market cap of $104m. Another MOP stock that got a mention on December 11. It was trading at 13.5c at the time. It has flagged that a resource upgrade and a scoping study will be released in the next couple of months for its advanced project in what is a historic potash region of central Germany.

AGRIMIN (ASX:AMN): Trading at 46.5c for a market cap of $133m. It has just signed another binding offtake agreement for its Mackay SOP project in WA, taking offtake coverage for the project to the desired 70%.

The project is expected to be shovel-ready by mid-2022. Mackay’s cash costs have been put at $US159/t, making it one of the lowest cost, if not the lowest cost, SOP projects out there. Agrimin recently noted that SOP prices in Europe had climbed to $US860/t.

TRIGG (ASX:TMG): Trading at 10c for a market cap of $17m. A company commissioned research report by Corporate Connect arrived at a price target of 32c.

Given its modest cap, it is a leverage play on the fertiliser thematic. Its Lake Throssell SOP project has some real scale about it, and a preliminary feasibility study is due early in 2023. An earlier scoping study that returned robust economics assumed a SOP price of $US550/t compared with recent highs of about $US940/t.

PHOSCO (ASX:PHO): Trading at 13.5c for a market cap of $33m. Its Chaketma phosphate rock project in Tunisia is as big as they come. Now that it has resumed control of the project after winning an ownership dispute, a re-rating is in store as the fresh momentum around the company and project deliver strong newsflow.

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