Hong Kong stock concept tracking | Middle East conflict combined with El Nino phenomenon may push up grain prices, the prosperity of the planting industry chain is expected to improve (with concept stocks)

According to reports, meteorologists have indicated that a highly intense El Nio phenomenon may form later this year, exacerbating global food security concerns. It is worth noting that this "super El Nio" may occur against the backdrop of soaring fuel and fertilizer prices due to the Iran conflict, causing market anxiety. An analyst told CNBC that El Nio could drive up prices of cocoa, edible oils, rice, and sugar. Climate scientists warn that the likelihood of a global warming-induced El Nio phenomenon in the coming months is increasing. The US meteorological department predicts a one-third probability of "strong" weather events occurring from October to December. European climate models show a higher probability of an extremely strong or "super El Nio," but the so-called spring forecast obstacles mean these predictions may have deviations. Chris Jackarine, a senior analyst at the Energy and Climate Intelligence Unit, stated that 2026 may once again be a year of overlapping conflict and climate risks, leading to high costs. Following the US military action against Iran, the blockade of the Strait of Hormuz has led to a sharp rise in global fertilizer prices, potentially jeopardizing global food production and supply. It is reported that nitrogen, phosphorus, and potassium, necessary for food production, are derived from natural gas, with nitrogen-based urea and ammonia promoting leaf and stem growth being synthesized by combining hydrogen extracted from natural gas with nitrogen in the atmosphere. Gulf countries such as Qatar, Saudi Arabia, and Oman, rich in natural gas resources, are major exporters. After the outbreak of the conflict, the World Bank's statistics show that the price of representative fertilizer urea rose sharply by 54% month-on-month in March. The World Bank's outlook for commodity prices shows that the international price of urea is $726 per ton, a significant increase from $472 the previous month, more than 1.8 times higher year-on-year. This marks the highest level since April 2022 when the Russia-Ukraine conflict led to a rise in fertilizer prices. Earlier warnings from the US bank indicate that the conflict could threaten 65% to 70% of global urea supply, with prices rising by 30% to 40%. The World Bank's senior agricultural economist John Baffes analyzes that "the chaos in the Middle Eastern transportation routes not only affects fertilizers and energy but also has an impact on the raw materials necessary for food production." The World Bank, the International Monetary Fund (IMF), and the United Nations World Food Programme warned on Wednesday that the sharp rise in oil, natural gas, and fertilizer prices due to the Middle East war will inevitably lead to higher food prices and food security issues. In a joint statement following a meeting on the Middle East war, the leaders of these global institutions said that the most severely affected would be the world's most vulnerable populations, especially those in low-income, import-dependent economies. They stated that the institutions will continue to closely monitor developments and "coordinate the use of all available means to support those affected by the crisis." The joint statement said, "The war in the Middle East is disrupting the lives and livelihoods of the people in the region and beyond. This war has triggered one of the most severe disruptions to global energy markets in modern history." "The sharp rise in oil, natural gas, and fertilizer prices, coupled with transportation bottlenecks, will inevitably lead to higher food prices and food security issues." The United Nations Food and Agriculture Organization (FAO) stated last Friday that global food prices had risen to their highest level since September last year due to the surge in energy prices and rising freight costs caused by the Middle East war. If the conflict continues, grain prices may continue to rise. China's strategic position in food security is prominent. The "Number One Document" for 2026 continues to emphasize securing the bottom line of national food security and stabilizing the development of grain and oil production. It for the first time emphasizes the "implementation of" a new round of a hundred billion kilograms of grain production capacity enhancement action plan, stabilizing grain production at around 1.4 trillion kilograms. It also introduces the "implementation of grain circulation quality improvement and efficiency enhancement project" and implements the inter-provincial horizontal benefit compensation policy for grain production and sales areas. Huaan's research report points out that the supply of staple foods is tight, and global agricultural supply chains are disrupted by geopolitical conflicts, further strengthening the underlying logic of food security. In addition, external trade frictions increase market uncertainty, and the rigid demand and undervalued characteristics of the food sector attract hedging funds. Sinolink pointed out that amidst the strong uncertainty in the external environment, China continues to promote the revitalization of the seed industry to increase production through improving grain yield per unit. At the same time, global weather disturbances may lead to a certain degree of reduction in overall crop production, with the planting sector bottoming out, and if grain production significantly decreases, the planting industry chain is expected to see an improvement in prosperity. Related concept stocks: SINOFERT (00297): SINOFERT (00297) reported its performance for 2025, with revenue totaling RMB 23.263 billion, a 9.40% increase year-on-year. The company's attributable profits amounted to RMB 1.259 billion, an 18.66% increase year-on-year. Basic earnings per share were RMB 0.1793, with a final dividend of HKD 0.0693 per share. The increase in revenue was mainly due to the rise in average selling prices. Sales volume during the period was 7.31 million tons, a slight increase of 1.39% year-on-year; biofertilizer sales volume was 1.54 million tons, an increase of 14% year-on-year. The increase in profits was mainly driven by the group's firm promotion of the "bio +" strategy, continuous improvement of product technology content, strengthening of product quality control and cost management, improvement of sales channels service quality through consolidating diversified sources and enhancing marketing channels, driving the overall improvement in sales gross profit compared to the same period last year. CHINA XLX FERT (01866): In 2025, Xinli Xin achieved operating income of RMB 25.35 billion, an increase of nearly 10% year-on-year, reaching a record high; achieving a net profit attributable to the parent of approximately RMB 932 million. In 2025, the group comprehensively applied two-coal co-firing technology and simultaneously promoted special cost reduction technology transformation, effectively reducing production costs by 13% and achieving comprehensive energy consumption 10% lower than the industry average. In addition, in 2025, the company significantly increased its overseas orders, with overseas income accounting for 4 percentage points higher year-on-year, and the growth momentum of overseas business continued to be released. SHIYUE DAOTIAN (09676): The company is a Chinese company mainly engaged in the production and sale of staple food products. The company operates three divisions. The Rice Products Division mainly produces various types of pre-packaged rice products. The Coarse Grains, Beans, and Other Products Division mainly produce pre-packaged brown rice, millet, red beans, and sesame. The Dry Goods and Other Products Division mainly produces pre-packaged wood ear mushrooms, trembling, lotus seeds, as well as bran, rice husks, broken rice, and other by-products. The company mainly conducts business in the domestic market.