Richard Henderson AFRNufarm shares fell 8.6 per cent to $4.59,...

Richard Henderson AFR

Nufarm shares fell 8.6 per cent to $4.59, the biggest tumble since June last year, despite the company swinging to a $61 million profit for the year ended September from the year-earlier’s $73 million loss. The decline appeared to reflect comments from Nufarm CEO Greg Hunt, who warned about the prospect of weaker margins because of higher costs.“Increasing cost of raw materials as well as global logistics and supply chain challenges, will continue to pressure margins,” Mr Hunt said.

In times of cost/margin pressures companies that can increase prices and still push product out the door are winners. Provided there is product available and competitors will be in the same position re margins, the growers will need to take advantage of good weather conditions and so pay the higher prices and hope that grain prices stay high. Still looking for a recovery over next few days.