Gas en meststoffen bedreigen mondiale voedselvoorziening (1)
March 16, 2022 - Massive trade sanctions on Russia, highly volatile natural gas prices, and fertiliser exports from Russia and Ukraine grinding to a halt could lead to skyrocketing global food prices.
Ukraine’s agriculture ministry slapped a zero quota on exports of fertilisers on Saturday (March 12, 2022) and introduced licenses for its key exports -- wheat, corn and sunflower oil. The de facto ban applies to nitrogen, phosphorus, potassium and complex fertilisers.
On March 9, Norwegian fertiliser giant Yara International cut production at its Italian and French plants by 55 per cent following record-high natural gas prices in Europe.
“It’s not whether we are going to have a food crisis. It’s how large that crisis will be,” Yara CEO Tore Holsether told CNN Business.
Yara’s two plants have a combined annual capacity of 1 million tonnes of ammonia and 900,000 tonnes of urea. Yara delivers some 29.0 million tonnes of fertiliser per year.
Globally, fertiliser prices have gone up by almost 273 per cent since March 2021. Black Sea Urea Free-on-Board, or FOB, prices surged to US$418.75/tonne in September 2021. Prices have taken a further hit with the ongoing Russia-Ukraine war and reached a record-high $962.48/tonne last week.
Holsether said costs have become too high to keep operations running at scale. He’s not sure when European production will be at total capacity again.
“There’s a large part of the industry that’s at risk of not being able to deliver products to the farmers, and that will have an impact on the crop yields quite rapidly,” he warned.