Following Harvest Minerals Ltd (AIM:HMI, OTC:HMIFF)’s second-quarter trading update in June, the AIM-listed fertiliser producer has noted a further drop in fertiliser sales and prices for July.
The group said it “regrettably” recorded July sales below revised internal expectations, booking 36 kilotonnes (kt) of new orders for the period, excluding the additional 33kt of advanced sales that had been invoiced in 2022.
Harvest surmised that farmers are continuing to delay purchasing fertiliser until greater stability in the market is seen; low crop prices and high energy costs being some of the factors unbalancing the market.
Market observers are widely predicting that fertiliser demand is expected to improve throughout the remainder of the year; however, given the volatile market conditions experienced to date, Harvest has revised again its 2023 invoiced sales target to 70,000 tonnes from 120,000 tonnes.
"We realise that this is disappointing news, but it is a consequence of macroeconomic factors affecting the sector as a whole and a function of operating in an industry that is prone to fluctuations caused by seasonal and macro-economic trends,” stated Brian McMaster, chairman of Harvest.
He continued: “After the high fertiliser prices seen last year, driven by the war in Ukraine and sanctions, many farmers have delayed purchasing this year, using their contingency supplies, or choosing to hold back as crop prices have also been low.
“We are looking for signs of recovery and remain ready to supply product as buying recommences."