Like most commodities, fertiliser prices fluctuate at historic highs. The U. S. fertilizer price index, created by the media, which mainly tracks urea, potash and DAP, was quoted close to a 30-year high on Wednesday. The crisis in Ukraine is likely to tighten the market because Russia has about 21 per cent of the global potash market, according to the US Fertilizer Research Institute (Fertilizer Institute).

Zhitong Finance has reported that fertiliser prices have risen sharply due to supply bottlenecks caused by the COVID-19 epidemic and the rising cost of natural gas to produce fertiliser. The conflict between Russia and Ukraine, as the world's major exporters of fertiliser and wheat, has exacerbated the impact of the conflict.

Take urea as an example, urea is a common nitrogen fertilizer. In New Orleans, after a full escalation of the situation in Russia and Ukraine, the weekly price of urea soared 29%. As a result, farmers will face higher food production costs, and consumers will pay higher prices in grocery stores and restaurants.

Arlan Suderman, chief commodities economist at StoneX, a financial services network, said: "We are likely to tighten fertilizer supply before the North American growing season, which will affect global production for the whole year."

To make matters worse, with a rail strike looming in Canada, US access to fertilizer imports is likely to shrink further. Canada produces about 39% of the world's potash, while most of the potash used by American farmers also comes from Canada, according to the Fertilizer Research Institute. On Wednesday, 3000 workers at Canadian Pacific Railway (CP.US) voted to go on strike on March 16 if their demands are not met. A rail strike ahead of the Canadian spring planting season could have an impact on American farmers and further push up food prices.

In the event of a strike, shares of domestic fertiliser producers would rise at the same time; MOS.US, CF Industrial Holdings (CF.US), CVR Partners (UAN..US) and Nutrien (NTR.US) all closed higher on Wednesday. The news comes as wheat prices hit record highs and edible commodity prices hit record highs.

And the surge in fertilizer prices is not a new problem. In December, US farmers asked the US Department of Justice to investigate whether the recent surge in fertilizer prices was caused by fertiliser companies manipulating the market, according to media reports. The prosecution letter claimed that fertiliser companies priced not on the basis of basic supply and demand, but on the prices received by farmers on the basis of their commercial crops.

According to a 2020 report by the US Federal Trade Commission (FTC), a worrying problem is that the consolidation of the US fertiliser industry has resulted in Nutrien and Mei Sheng controlling 93 per cent of the North American potash market.

Shares of the two companies also performed well last year, when fertiliser prices in North America hit more than 10-year highs. Nutrien shares, which have been on an upward path since the outbreak began, hit record highs last year and have risen steeply since the start of the crisis in Ukraine, up 27.5 per cent so far this year.

The company's shares have performed even better, rising nearly 4.6-fold from the low at the start of the epidemic to its current price since mid-March 2020 and up 40 per cent so far this year.