Global Fertilizer Companies warn against instability in food supplies

Global fertilizer companies have issued warnings that the Russian war in Ukraine will shock global food supplies as fertilizer prices soar.

Russia is one of the most important exporters of fertilizers globally, while it also contributes a large proportion of the necessary nutrients to the soil in global markets.

It is also the second-largest producer of natural gas, which plays a major role in the production of chemical fertilizers.

The fertilizer supply had witnessed a major crisis before the Russian-Ukrainian war due to “Covid-19” and the high prices of natural gas, which constitutes an important element in the production process, in addition to other factors that led to a strong rise in the prices of agricultural fertilizers.

The head of the Egyptian Abu Zaabal Fertilizers and Chemicals Company, Sherif El-Gabaly, said that Russia represents more than 13% of the world trade in fertilizers, and some estimates are pointing to 20%.

El-Gabaly added that this share is large and has a direct impact on international prices, which rose sharply during the past two weeks and reached unprecedented levels.

He pointed out that the price of urea fertilizer reached 1200 dollars per ton, compared to 600 dollars before the Ukrainian war, i.e. it doubled.

He stated that the jump in gas prices in Europe led to the suspension of some factories that could not bear the high costs, as gas represents 60% of the cost of fertilizer such as urea.

“The rise in fertilizer prices will have a direct impact on agricultural production and will raise the cost of crops. The continuation of this situation for a long period will have negative effects on food security in the world.”, El-Gabaly said.

He indicated that pricing the effects of higher costs due to fertilizers will gradually begin to appear in food prices.

Regarding the alternatives available in the fertilizer market, El-Gabaly said that the alternatives are very limited, explaining that any new production capacity needs at least 3 years to start production.

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