Producers of Hunger

Obstructed Exports

The World Bank has recently described the growing fertilizer crisis in very concise terms. Up to last year, Russia and Belarus had produced nearly 20% of all global fertilizer.[1] Concerning individual minerals – such as potash – the two countries combined have a global market share of around 40 percent. Already last year, the situation became worse when the United States and the EU imposed sanctions on Belarus.[2] However, initially the EU’s sanctions regime had loopholes – most likely intentionally – that prevented the supply of Belarusian fertilizers to third countries from collapsing.[3] Since Russia’s intervention in Ukraine, sanctions against Russia have been added. The EU insists that it is meticulously ensuring that exports of fertilizers and grain are exempt from the sanctions. This is formally the case, but practically, nearly meaningless. Since sanctions continue to affect the Russia’s financial, transport and other sectors, fertilizer supplies continue to be obstructed to a considerable extent. They are thus unavailable on the world market.

Noticeable Delay

There are additional factors related to the sanctions. According to the World Bank the supply chains of fertilizer production in Russia and Belarus are also affected.[4] This is restricting production. Russia has therefore begun somewhat to restrict its fertilizer exports to ensure that its own agricultural needs can be met under even more difficult conditions. The production of fertilizers needs large amounts of natural gas, thus massively driving up the costs due to the spike in gas prices. This in turn also affects fertilizer producers outside Russia and Belarus. One must also bear in mind that, for a certain period of time, fertilizer supply problems are hardly noticeable to the public. As the World Bank notes, food consumed today was often produced six months earlier – with the help of fertilizer bought one year ago. High prices for fertilizers are thus being reflected in food prices with a delay of about one year or even more. Concerning fertilizers, the full impact of the sanctions imposed on Russia since February will only be felt next year.

“Shooting Oneself in the Foot”

Europe is also threatened with serious difficulties. Due to the embargo policy, the skyrocketing price of natural gas – which accounts for up to 70 percent of the cost of fertilizer production – is considered one of the main causes. Already in March, the first European manufacturers announced they were beginning to reduce their production of fertilizer, due to the astronomical price of gas. At the time, fertilizer was costing four times what it had cost the previous year.[5] In August, SKW Piesteritz, one of Germany’s largest fertilizer producers, was forced to shut down production.[6] Currently, production is due to restart, however it is fully uncertain, whether it can be durably secured. Also in other EU countries, such as Poland, fertilizer production has been forced to be reduced, at times, drastically. On Tuesday, it was announced that Norway’s giant Yara International fertilizer plant will shut down a Belgian subsidiary in the next few days.[7] This could reduce the availability of ammonium nitrate, which serves as fertilizer, by 10 percent according to information from industrial circles in France. According to the US magazine Forbes, fertilizers account for only 0.1 percent of the Russian budget. Making their import impossible – while domestic production collapses – make as much sense as “shooting oneself in the foot.”[8]

Minus 20 Percent

The consequences for poorer countries, such as those on the African continent, are hardly foreseeable. In August, the African Development Bank announced that the continent was already lacking 2 million metric tons of fertilizer – a catastrophe for farming, especially given the decades of policies designed to promote the use of western companies’ artificial fertilizers, making African farmers dependent on agrochemicals of all kinds.[9] The lack of fertilizer could lead to a slump in food production in Africa by at least 20% or more, experts estimate.[10] In West Africa, where, prior to the war, for example, 70% of potassium was imported from Russia and Belarus, prices of fertilizers have doubled, and even tripled in some markets. Exceptionally difficult is the situation in the Sahel region, which is already seriously affected by climate change. In summer, it was hit by the worst drought in over a decade, and is also suffering under rampaging jihadis.[11] At the same time, in Burkina Faso more than 80% of the population lives off of agriculture. Responsible for the looming catastrophe are not the respective governments of the African countries, but the West, whose sanctions policies are the main cause of the fertilizer crisis.

UN Initiatives

The United Nations has been trying to apply countermeasures for months. Since the spring, UN Secretary-General António Guterres has been trying to enable the usual volume of fertilizer supply from Russia, alongside grain exports from Ukraine. The deal reached last July between the United Nations and Moscow and Kiev provides for both to be activated. Since some time, Moscow has been complaining that fertilizer deliveries are impossible because of the West’s ongoing sanctions policies. Guterres had used his traditional opening speech to this year’s annual UN General Assembly to again address the dramatic nature of the situation. It is “essential” to finally “remove all remaining obstacles to the export of Russian fertilizers and their ingredients, including ammonia” declared Guterres, otherwise the global fertilizer shortage will quickly morph into a global food shortage.[12] We need to act quickly.

Power Struggle takes Precedence

Blatantly ignoring the unanimous verdict of experts and the UN General-Secretary’s appeals, the West rejects all responsibility. Our sanctions explicitly allow Russia the ability to export food and fertilizer,” US President Joe Biden claimed before the UN General Assembly yesterday, deliberately ignoring that sanctions on the financial, transport and other sectors are severely obstructing exports.[13]. German Chancellor Scholz was also quoted with his false statement that “not the sanctions decided” [by the West] were “the cause of the global food crisis.”[14] There is no willingness to give precedence to securing global food supplies over the power struggle against Russia.

For more information on this subject: After us the Deluge.

[1] Fertilizer volatility and the food crisis. worldbank.org 22.07.2022.

[2] See also In the Spiral of Sanctions.

[3] Most Belarus potash exports not affected by EU sanctions – analysts. financialpost.com 25.06.2021.

[4] Fertilizer volatility and the food crisis. worldbank.org 22.07.2022.

[5] Bert Fröndhoff, Maike Telgheder, Katrin Terpitz: Düngerhersteller drosseln Produktion: Weltweit drohen Einbußen bei Ernten. handelsblatt.com 11.03.2022.

[6] Johanna Michel: Gaspreise: Stickstoffdünger-Fabriken fahren Produktion herunter. agrarheute.com 24.08.2022.

[7] Olaf Zinke: Yara schließt Düngerwerke – steht Europa bald ohne Dünger da? agrarheute.com 21.09.2022.

[8] Kenneth Rapoza: Europe’s Other Crisis: Fertilizer Shortage For Farming. forbes.com 19.09.2022.

[9], [10] Eddy Wax, Bartosz Brzezinski: ‘Enormous‘ fertilizer shortage spells disaster for global food crisis. politico.eu 09.08.2022.

[11] Fertilizer shortages in conflict-torn Burkina Faso threaten crops and food security. northafricapost.com 26.08.2022.

[12] Secretary-General’s address to the General Assembly. un.org 20.09.2022.

[13] Biden: Russland will Ukraine auslöschen. zdf.de 21.09.2022.

[14] Bundeskanzler Scholz trifft den türkischen Staatspräsidenten Erdogan. bundesregierung.de 20.09.2022.