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Whyismypponfire t1_j1ufz2a wrote

Reply to comment by [deleted] in Soaring fertilizer prices could see millions more undernourished by Vucea

I thought the price went up for a reason, not just them being greedy? I don’t know much about economics so can you explain? They can’t just lower the price cause they want to be more affordable right?

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[deleted] t1_j1ui61y wrote

The price is determined by multiple factors, but record profits are a clear indication that they absolutely could afford to charge people less.

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There is the additional pressure of wanting to stay on the good side all the other people who profit off it.

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crumbs4manatees t1_j1ulzl8 wrote

Revenue and profits are not the same thing. Yes, their cost of operating the business may have increased. But the only way to increase profits while thats happening is to sell more (not likely if supply is struggling) or to outpace the cost of business with your own price increases. Effectively they’ve seen an opportunity to raise prices, blaming it on a conflict, and then jacked them up far beyond necessary in the name of profits.

Profit margin gives us a pretty good indicator if that’s happening. Nutrien has increased their profit margins 60% as compared to last year. CF industries - profit margins up 238%. Mosaic Co - profit margins up 44%. So yes, they could absolutely keep prices lower if they wanted. They just don’t.

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