The Russian Industry Ministry announced a ban on fertilizer exports March 9. The big implications for crop reductions include the fact that Russia has supplied Europe with 25% of its NPK–nitrogen, phosphorus and potassium–either directly or indirectly., and supplied many other nations, and at moderate prices. Russia and Belarus are both top-ranking crop nutrient suppliers. Under U.S. pressure, Vilnius had already, earlier this year, banned the shipment of Belarus potash transit by Lithuanian rail to the Baltic Sea, a long-traditional shipment route. Europe already had a fertilizer crisis in 2021, from the shortage of nitrogenous fertilizers, when some manufacturers stopped making it, due to the surging prices of natural gas, a fertilizer feedstock.
Russia exports around 70% of the total volume of mineral fertilizers produced in the country, and it is holding back exports in support for its own agriculture sector. Many Chinese firms are also suspending certain fertilizers, including phosphates. They did this last year as well.
Nutrien, the biggest fertilizer company in the world, based in Canada, is not sanguine it can ramp up production to fill these export gaps. Nutrien share values are soaring off the charts, but you can’t eat money.
The shortage and chaos in fertilizer supplies will absolutely pull down crop yields, and even deter planting. Why should the farmer bother?
Experts interviewed by Nezavisimaya Gazeta this week stress the guaranteed negative impact on food prices. “High gas prices are forcing European producers of nitrogen fertilizers to stop production,” head of the Energy Development Center Kirill Melnikov said. “This will also affect food prices, because European farmers will have to buy more expensive fertilizers, primarily from the US,” he added, although it is wishful thinking. The U.S. has not been a big fertilizer-surplus nation, and there’s no guarantee it can ramp up.
If nothing is done to mitigate the fertilizer crisis, yields of cereal grains in 2022 will fall by 50%, warned Svein Tore Holsether, the president of Yara, one of the top three fertilizer companies in the world, operating in 60 nations. “It’s not whether we are moving into a global food crisis, it’s how large the crisis will be.”
Many nations are announcing food export bans in defense of what stocks they have. For example, Egypt has banned export of lentils, beans and pasta (which they had supplied to Senegal and elsewhere in Africa, as well as Saudi Arabia). Egypt, the world’s largest wheat importer (13 million metric tons in 2021) is otherwise searching the world to line up wheat imports, since it had been nearly 80% dependent on Ukraine and Russia for its wheat imports until now.
Russia announced on March 10, selective bans on its wheat exports. Indonesia has announced a reduction in palm oil exports.
