- The CEO of Yara International, a major fertilizer producer, told WSJ there will be a food crisis.
- Bloomberg Green Markets North America Fertilizer Price Index jumped 10% Friday to an all-time high.
- Sweeping sanctions over the Ukraine war are limiting fertilizer supplies from major producers in Russia.
EU sanctions against Russia over the war in Ukraine are driving up fertilizer prices, leading to what one CEO said is going to be a food crisis.
“We are going to have a food crisis. It’s a question of how large,” said Svein Tore Holsether, the CEO of major fertilizer producer Yara International, the Wall Street Journal reported on Friday.
His comments came as the Bloomberg Green Markets North America Fertilizer Price Index jumped almost 10% on Friday to an all-time high.
On March 11, Norway-based Yara International announced that, due to EU sanctions, it would no longer be sourcing supplies from Russia. But Holsether said he was weighing a moral dilemma even before sanctions hit, as he knew cutting Russian supplies would contribute to food inflation.
Russia accounted for almost one-fifth of 2021 fertilizer exports, according to Trade Data Monitor and Bloomberg’s Green Markets. Russia is also a top exporter in key fertilizer ingredients such as urea, ammonia, and potash, per trade outlet Argus Media.
The loss of Russian fertilizer supply is expected to cause severe strain to the supply of crop nutrient, which was already under pressure before the war as European fertilizer producers cut output due to high gas prices and as freight rates soared, according to Bloomberg. There are few alternatives available.
“Replacing their volumes would take nearly half a decade at the very best, and in some cases prove nearly impossible as Russia is a large source of mineral deposits found in few other global locations,” Alexis Maxwell, an analyst for Bloomberg’s Green Markets, said on March 5, per the media outlet.