- Russian and Belarusian exports of fertilizer chemicals decline under sanctions
According to Nikkei Asia article published on November 10, 2022, harvests have fallen in some parts of Asia and Africa as rising prices have made fertilizers inaccessible to farmers in developing nations, raising fears of an exacerbated food shortage.
Sanctions imposed on Russia and Belarus in the wake of Moscow's invasion Ukraine have undercut supplies of potassium chloride, a key fertilizer compound.
Inorganic fertilizers require nitrogen, phosphoric acid and potassium as raw materials. Russia and Belarus together account for 40% of the global exports of potassium chloride. As a result, prices of fertilizer raw materials are 60% to 70% higher in 2022 than last year, the World Bank said in October.
As the supplies decline, deep-pocketed developed countries are rushing to secure fertilizers and raw materials. The U.S. announced $500 million in subsidies for fertilizer makers in September.
The subsidies are double the amount of a similar program announced in March, just after Russia invaded Ukraine. The Biden administration looks to create a national supply chain for inorganic fertilizers.
Japan now imports raw materials for fertilizer mainly from Morocco and Canada, switching away from Russia and China. To ensure stable supplies of fertilizer, countries "need to shift to domestic production and diversify the supply chain" of raw materials, said Yasufumi Miwa, an agriculture expert at the Japan Research Institute.
But in low-income developing nations, many farmers lack access to enough fertilizer. The International Fertilization Association forecasts up to a 7% decrease in global use of chemical fertilizer for the 2022 fertilizer year, with significant drops projected in Asia and Africa.
Global corn production would fall 1.4%, rice 1.5% and wheat 3.1%, according to the IFA. The global food shortage could remain unresolved in 2023, said John Aylieff, regional director for Asia and the Pacific at the United Nations' World Food Program.
Even in emerging and developing countries, "disparitieswill widen between farmers who can afford fertilizers and those who cannot," said Yukiko Nozaki of the Mitsui & Co. Global Strategic Studies Institute.
In Sri Lanka, which is facing an economic crisis, 2021-22 harvests are on track to plunge between 40% and 50% on the year, by U.N. estimates. Former President Gotabaya Rajapaksa, who was ousted in July, had banned the use of chemical fertilizers.
The measure was ostensibly to promote organic farming but actually resulted from a shortage of foreign currency to import synthetic fertilizers. The ban has since been lifted, but Sri Lanka still suffers from a lack of fertilizers.
In Myanmar, rice yields are expected to fall significantly. 2022 production will be about 10% below the five-year average, the U.N.'s Food and Agriculture Organization forecast in October.
This decline traces back to the sanctions imposed by Western nations on Myanmar, whose government was taken over by the military in 2021. Much of Myanmar's rural areas have essentially turned into war zones.
Rice is one of Myanmar's main exports, and reduced yields will inevitably tighten supplies.
