El Niño is turning from a weather story into a portfolio question, as a supersized pattern threatens crops, feed chains and input costs through to 2027. That kind of pressure can reshuffle which agricultural input stocks look resilient and which look fragile. This article steps through three stocks from our Global Agricultural Inputs and Crop Protection screener that appear positively exposed to this news and explains what that might mean for your watchlist.

The three stocks highlighted next are just a starting sample from this theme. The full screen surfaced 26 more companies with equally compelling agricultural input and crop protection narratives that are not covered here. To widen your watchlist and identify your own high conviction ideas, head straight into the Global Agricultural Inputs and Crop Protection screener.

Saudi Basic Industries (SASE:2010)

Saudi Basic Industries is a global chemicals and materials producer with a significant agri nutrients arm, which ties it directly to the fertilizer side of the Global Agricultural Inputs and Crop Protection theme. Most of its SAR119.7b in segment revenue comes from petrochemicals at about SAR96.2b, with agri nutrients contributing roughly SAR11.5b through products such as urea, ammonia and phosphate fertilizers. The company is a large cap player with a market value of about SAR148.5b.

Saudi Basic Industries provides exposure to a large fertilizer producer that is also reshaping a global petrochemicals and advanced materials portfolio. Management is focusing on efficiency, asset clean up and higher margin projects. El Niño related pressure on crop yields could keep attention on nutrient efficiency and fertilizer availability. At the same time, the group is still loss making, carries higher risk funding on its balance sheet and pays a dividend that is not well covered by earnings or free cash flow. For investors assessing whether the projected earnings recovery and portfolio shift are sufficient to offset these issues, this is a story worth examining in more detail.

Saudi Basic Industries is already reshaping its petrochemicals and agri nutrients mix, yet the real story sits in how its balance sheet, funding and dividend policy fit together. Get the full picture in the Saudi Basic Industries financial health report

Asia-potash International Investment (Guangzhou) Co.Ltd (SZSE:000893)

Asia-potash International Investment (Guangzhou) Co. Ltd is a pure play on potash fertilizers, which are a core crop nutrient in the Global Agricultural Inputs and Crop Protection theme. The company generated about CN¥6.6b from potash fertilizer in its latest period, with revenue primarily linked to supplying growers in China and overseas. It is a mid to large sized stock with a market value of roughly CN¥43.9b.

Asia-potash International Investment (Guangzhou) Co. Ltd gives investors direct exposure to potash at a time when an extended El Niño is keeping attention on fertilizer use to protect crop yields. Analysts report expectations for strong earnings and revenue growth, and the stock currently trades well below one estimate of fair value, which can increase interest for value focused investors. The trade off is a balance sheet that relies fully on higher risk borrowings and a board still bedding down after several recent director changes. For investors assessing whether the growth, margins and valuation profile adequately offsets those funding and governance questions, this company may warrant closer examination.

Asia-potash International Investment (Guangzhou) Co. Ltd combines strong growth expectations with a P/E that some investors may view as attractive. Before sentiment shifts, read the analyst forecasts for Asia-potash International Investment (Guangzhou) Co.Ltd that could reshape the story.

Nufarm (ASX:NUF)

Nufarm is a pure play on crop protection and seed technologies, supplying herbicides, fungicides, insecticides and high yield seeds that fit squarely into the Global Agricultural Inputs and Crop Protection theme as farmers respond to more erratic weather. It generated about A$1.3b from Crop Protection in North America, A$909 million in Europe, A$808 million in APAC and A$365 million from its global Seed Technologies arm, giving it a broad spread across both chemistry and seeds. The stock has a market value of about A$1.3b, placing it at the smaller end of the mid to large cap range in this screener.

If you want targeted exposure to how farmers respond financially to a long El Niño, Nufarm is worth a closer look. The company is tightly linked to herbicide, fungicide and insecticide demand when growers fight weeds, pests and disease in tougher seasons. Its Seed Technologies platforms in bioenergy and plant based omega 3 aim to push into higher margin, more resilient niches. The trade off is a balance sheet that relies on higher leverage and a business that is still working through losses and volatile returns. For investors who can handle that risk in exchange for potential upside from weather driven input demand and product mix shifts, Nufarm offers a complex story that the headline numbers do not fully explain.

Nufarm’s weather linked story could be only half written. Input demand, seed technology and leverage are pulling in different directions. See how that tension shows up in the analysis report for Nufarm

Curious About What Else You Could Be Exploring

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.