Global fertiliser shortage and record prices may lead to food crisis

A worldwide shortage of fertiliser due to high production costs is driving up food prices and creating a crisis for poorer countries, according to the president of a major fertiliser company.

The production of fertiliser requires large amounts of gas, and the sharp rise in energy prices had driven up production costs, Svein Tore Holsether, CEO and president of Norwegian fertiliser giant Yara International told the BBC on 26 November. This had led to a supply shortage of fertiliser which in turn was pushing up food prices. Yara had been forced to cut some production due to higher gas prices, Holsether said, which had led to shortages.

Global nitrogen fertilizer sales were worth US$53 billion in 2020 and prices are at least 80% higher so far this year, according to Argus Media.

Holsether said developing countries would be hit hardest by the fertiliser shortages with crop yields declining and food prices rising.

“It's really scary, we are facing a food crisis and vulnerable people are being hit very hard,” he told the BBC's Today programme.

“It's impacting food prices all over the world and it hits the wallets of many people. But for some people, especially in the developing world, this is not only a question about the wallet, but it's a question of life or death.”

In North America, the record fertiliser prices were prompting farmers which could in turn lead to a rush to apply fertiliser before the spring planting season, according to a Reuters report on 24 November

Farmers applied nitrogen to boost yields of corn, canola and wheat before winter to reduce their spring workload, the report said. However, delaying fertiliser purchases until spring ran the risk of further supply chain congestion if farmers rushed to apply fertiliser and plant seed during a tight window.

North American farmers could reduce their fertiliser needs by planting more soyabeans and less corn but there was little evidence that many planned to do, Reuters wrote.