TORONTO (Reuters) – A labor dispute that shut down operations at Canadian Pacific (NYSE:) Railway Ltd on Sunday is about to irritate a scarcity of commodities sparked by Russia’s invasion of Ukraine, and a protracted lockdown might damage farmers forward of the spring planting season.

CP, Canada’s No. 2 railroad, halted operations after talks with employees’ union failed, with either side blaming one another for the result. Talks continued on Sunday with federal mediators on the desk.

Canada, the biggest nation by space after Russia, relies upon closely on rail to maneuver commodities and manufactured items to port. With 75% of all fertilizer in Canada moved by rail, the farm sector will really feel the warmth, trade physique Fertilizer Canada mentioned. The agricultural sector is already dealing with shortages and better costs as a result of Western financial sanctions on Russia and Belarus, two main fertilizer producers.

“The principle difficulty is the quick window to get farmers the fertilizer they want for his or her crops. We’re 4-6 weeks away from seeding in Canada and even sooner within the U.S.,” President and CEO Fertilizer Canada Karen Proud mentioned.

The influence of the strike might be felt south of the border as CP’s rail community runs as far south as Kansas Metropolis in america.

“A CP work stoppage will carry further uncertainty to fertilizer markets within the U.S.,” Corey Rosenbusch, the Fertilizer Institute president and CEO mentioned, including america imports 86% of its potash from Canada, a lot of it by rail.

Nutrien (NYSE:) Ltd, the world’s largest fertilizer producer, might climate a CP shutdown lasting a couple of days, because it has moved potash from its Canadian mines to U.S. shops forward of spring planting, interim Chief Govt Ken Seitz instructed Reuters. However an extended shutdown would drive Nutrien to contemplate slowing potash manufacturing, Seitz mentioned.

Nutrien plans to spice up potash output by almost 7% this 12 months to about 15 million tonnes as a result of provide uncertainty.

The lockout at CP is the most recent blow to Canada’s battered provide chain, which final 12 months weathered floods in British Columbia that suspended entry to Canada’s largest port.

An eight-day strike at Canadian Nationwide Railway (TSX:) Co in 2019 price the fertilizer trade between C$200 million-C$300 million ($159-$238 million), the trade group estimates.

The Mining Affiliation of Canada mentioned the work stoppages akin to that of CP’s carry further operational prices to companies and “scale back confidence in Canada” as a vacation spot for funding for supply-chain reliant companies.”

($1 = 1.2601 Canadian {dollars})