Fertilizer Shortages Fuel The Global Food Crisis

On April 6, foreign media reported, since Russia and Ukraine are both the world’s major exporters of fertilizers and grains, the Russia-Ukraine war, which has lasted for more than a month, will make the world’s upcoming food crisis even worse.
According to reports, Russia exports 11% of the world’s Urea and 48% of ammonium nitrate; Ukraine and Russia jointly produce 28% of its nitrogen-based, phosphorus-based, and potassium-based fertilizers. In addition, Belarusian provides 40% of the world’s potash exports. However, after the Russian-Ukrainian war, Belarus has announced that it would be unable to perform the previously signed foreign trade export contracts due to “force majeure.”
Russia and Ukraine, which traditionally supply 30% of the world’s barley and 20% of the world’s corn needs, face a catastrophic food production crisis as the war has prevented the warring sides from planting seeds on time, and with the closure of Black Sea ports. Fertilizer shortages and high prices will push farmers to grow crops that require less fertilizer over a more extended period, leading to reduced yields of some essential crops months later. The cost of corn rose 57% in 2021, and wheat rose 27%, which is probably more worrying this year. Cereal shortages will also lead to price increases in other commodities, such as corn, wheat, and rice. In addition, the rising cost will lead to significant price increases in beef, pork, and poultry categories.
There are geopolitical risks, higher input costs, and even a dire fertilizer shortage, said Bart Melek, head of global commodity strategy at TD Securities. As a result, the world will face a catastrophic food crisis.