[YahooFinance] Farmers worldwide are feeling the sting of sanctions, as the Ukraine War has sent fertilizer prices soaring to new all-time highs, prompting concerns over a global food shortage.
Fertilizer prices last week were nearly 10% higher than the week before according to Green Markets North America Fertilizer Price Index, the highest price point ever recorded. Prices are now 40% higher than a month ago, before the invasion of Ukraine.
The surge in fertilizer prices reveals how dependent many of the world's farms are on Russian exports. Countries already afflicted by food insecurity now risk further production bottlenecks and food shortages at the worst possible time.
RUSSIAN FERTILIZERS ARE EVERYWHERE
The farming industry has been hit hard by the war and the political reaction in Russia to Western sanctions. Russia was the world’s top exporter of fertilizers in 2019, according to data from the Observatory of Economic Complexity, when Russia’s trade volume in fertilizer stood at nearly $9 billion.
Russia and neighboring Belarus, which has also been hit by sanctions, are key exporters of several critical fertilizing compounds, including urea and potash, but curtailed exports of these products has caused prices to soar. Surging fertilizer prices have also been aggravated by higher costs for natural gas, a critical feedstock in producing nitrogen-based fertilizer, amid a U.S. ban of Russian oil imports and discussions in Europe to decouple from Russian energy.
International shipping companies have largely suspended their activities in Russia, bringing global trade to a standstill. And in early March, Russian officials told fertilizer producers in the country to slow their exports in retaliation to Western sanctions. |