The Food and Agriculture Organization of the United Nations recently said: Global fertilizer supplies are likely to fall short as tensions between Russia and Ukraine intensify, pushing up the cost of producing grains and other crops and leading to higher food prices. Market participants expect demand for fertiliser for crop production in developed countries to remain high this year and could lead to shortages in emerging and developing economies.
Russia, Ukraine and Belarus are big fertilizer producers. Russia, in particular, is an important supplier of nitrogen, phosphorus and potassium. Ukraine has a place in nitrogen fertilizer production. Belarus is a global potash producer and exporter.
Natural gas is the main raw material for nitrogen fertilizer production, and Ukraine, which depends on Russia for gas supply, could face a crisis. If the dispute with Russia worsens, Ukraine's fertilizer industry could be in trouble. Belarus, the world's third largest producer of potash, a three-ingredient fertilizer, after Canada and Russia, has been hit by Western sanctions, but supplies from the country are unlikely to cause a major global shortage. Russia is the world's largest exporter of nitrogen fertilizer, the world's second largest exporter of potash fertilizer and the world's third largest exporter of phosphate fertilizer. The United States and Europe could impose economic sanctions on Russia if the conflict with Ukraine worsens.
The International Fertilizer Industry Association (IFA) expects global fertilizer consumption to fall 3.0 percent in 2022-2023 from the previous year, due to the doubling of fertilizer prices last year.
FAO expert Josef Schmidhuber says shortages of nitrogen and phosphorus derivatives are expected in the second quarter of this year in both the northern and southern hemispheres, and if these fertilizer prices remain at current levels, fertilizer demand will fall in 2022-2023.
