High fertilizer prices impact developing countries and Europe – Impact on food prices a concern • Agricultural Policy News

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Wall Street Journal writer Jon Emont reported last week that “From the avocado, corn and coffee plantations of South America to the coconut and oil palm plantations of Southeast Asia, high fertilizer prices weigh on farmers in the developing worldwhich makes cultivation much more expensive and forces many people to reduce production.

“That means grocery bills could rise even more in 2022, after a year in which global food prices hit decade highs. A hike would be exacerbate hunger— already acute in some parts of the world due to pandemic-related job losses — and frustrate the efforts of politicians and central bankers controlling inflation.

“’Farms are failing and many people are not farming‘, said Rodrigo Fierro, 61, who produces avocados, tangerines and oranges on his 10-acre farm in central Colombia. He has seen fertilizer prices double in recent months, he said.

The Journal article noted that “American farmers are also feeling the pinch, with some change their planting plans. But the the impact is expected to be worse in developing countries where smallholders have limited access to bank loans and cannot prepay expensive fertilizers.

Fertilizer demand in sub-Saharan Africa could fall by 30% in 2022, according to the International Fertilizer Development Center, a global non-profit organization. This would translate to 30 million fewer metric tons of food produced, which the center says is equivalent to the food needs of 100 million people.

Also last week, Bloomberg writers Yuliya Fedorinova, Megan Durisin and Veronika Gulyas reported that, “As European farmers prepare to apply fertilizer to fields after winter, exorbitant nutrient prices leave them with little choice but to use less and try to pass the cost down the food chain.

“The Fertilizer Crisis is Coming Real for Food Prices in Europe”, by Yuliya Fedorinova, Megan Durisin and Veronika Gulyas. Bloomberg News (January 21, 2022).

“For growers of staples like corn and wheat, this is the first time they’ve really been exposed to a fertilizer. crisis fueled by an energy crisis, export restrictions and trade sanctions. It now costs much more to buy the chemicals needed for winter crops emerging from dormancy, and the extra expense could result in smaller spring plantings which account for around a third of European grain.”

“The Fertilizer Crisis is Coming Real for Food Prices in Europe”, by Yuliya Fedorinova, Megan Durisin and Veronika Gulyas. Bloomberg News (January 21, 2022).

Bloomberg editors explained that “Europe has been hardest hit by fertilizer plant cutbacks on soaring costs for the natural gas used to run them – and nutrient prices there remain at low levels. record even if the pressure has eased in North America. Europe could face a deficit of around 9% of its annual nitrogen fertilizer needs in the first half of the year, VTB Capital estimates. Food can get even more expensive if crops suffer or crop prices rise.”

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