Chief Executive Svein Tore Holsether said part of the reason for falling fertiliser prices was that farmers had been delaying purchases, due to the uncertain economic outlook and high fertiliser prices last year, but this trend was starting to reverse.
Farmers were no longer putting off purchases, Holsether said in an interview. "It changed towards the end of June," he said. "From mid-June to around right now, we have seen a rebound in urea prices of about 22% and a further increase earlier this week as well."
Urea fertiliser is the main nitrogen-based fertiliser farmers use.
"So there has been a rebound now ... (And) if you look at farmer economics, the ratio between fertiliser and crop prices, they are very healthy," Holsether added. "So we do see positive signs and a tighter nitrogen fertiliser market ahead."
Some analysts however noted the earnings shortfall. In a note to clients Norne Securities said the latest results featured a major miss to estimates for the second straight quarter and reiterated a "sell" recommendation.
"We are yet to see the stabilisation of earnings post super profits last year and uncertainty is very high," the analysts said.
Vast amounts of gas are required to produce fertilisers, so when gas prices surged last year following Russia's invasion of Ukraine, fertilisers became more costly to produce and thus more expensive for farmers to buy.
In 2023 fertiliser prices began falling, in step with declining gas prices, and Yara's earnings continue to be negatively affected.
Second-quarter earnings before interest, tax, depreciation, amortisation and excluding one-off items fell to $252 million versus $1.48 billion a year earlier, missing the $550 million expected by analysts.
Yara shares were down 2.3% at 0858 GMT, lagging a flat Oslo benchmark index but trimming an earlier loss of 4.8%.
(Reporting by Gwladys Fouche; Additional reporting by Victoria Klesty; Editing by Jason Neely and David Holmes)
By Gwladys Fouche
