There will be a food crisis, the question is “how big is it”
- The CEO of Yara International, a major fertilizer producer, told the WSJ there would be a food crisis.
- Bloomberg Green Markets North America Fertilizer Price Index jumped 10% on Friday to a record high.
- The sweeping sanctions linked to the war in Ukraine are limiting the supply of fertilizers to the main Russian producers.
EU sanctions on Russia over the war in Ukraine are driving up fertilizer prices in what one CEO says is going to be a food crisis.
“We’re going to have a food crisis. It’s a matter of magnitude,” said Svein Tore Holsether, CEO of major fertilizer producer Yara International, The Wall Street Journal reported on Friday.
His comments came as Bloomberg Green Markets North America Fertilizer Price Index jumped nearly 10% on Friday to a record high.
On March 11, Norway-based Yara International announced that due to EU sanctions it would no longer source from Russia. But Holsether said he weighed a moral dilemma even before the sanctions hit, because he knew cuts in Russian supplies would contribute to food inflation.
Russia accounted for nearly onefifth fertilizer exports in 2021, according to Trade Data Monitor and Bloomberg’s Green Markets. Russia is also a top exporter of key fertilizer ingredients such as urea, ammonia and potash, by outlet Argus Media.
The loss of Russian fertilizer supplies is expected to put a strain on crop nutrient supplies, which were already under pressure before the war, with European fertilizer producers reducing production due to high gas prices and skyrocketing freight rates, depending on Bloomberg. There are few alternatives available.
“Replacing their volumes would take almost half a decade at best, and in some cases would prove nearly impossible as Russia is a great source of mineral deposits found in few other places in the world,” he said. Alexis Maxwell, analyst for Bloomberg’s Green Markets. on March 5, according to the outlet.