“Fertilizer prices have reached a record high on the back of the war in Ukraine and its repercussions on trade flows. Russia is a key exporter of nitrogen, phosphate and potash fertilizers. Trade with Russia has not stopped but slowed significantly as importers and vessel charterers steer clear of the country.
Furthermore, gas is a key input for fertilizer production. High gas prices have resulted in a curtailing of production in regions such as Europe, further constricting an already tight market.
Sanctions in Belarus have huge implications for the potash market. Russia and Belarus combined contribute 40% of traded volumes annually.
Since the beginning of 2020, nitrogen fertilizer prices have increased fourfold, while phosphate and potash prices over threefold. While farmers in developed markets have benefitted from high agricultural commodity prices, helping to partly offset high input prices, demand destruction is increasingly likely due to high prices and supply shortfalls.
Fertilizer/plant nutrition is one of many variables in farming systems and a prolonged period of fertilizer underapplication will impact longer term yields. Given the already tight grains and oilseeds market, and the importance of both Russia and Ukraine in those markets, food price inflation is an increasingly prominent risk.”
Read the article online at: https://www.worldfertilizer.com/nitrogen/22032022/cru-comments-on-all-time-high-fertilizer-prices/