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Between shortage of fertilizers and soaring prices, importers of inputs no longer know where to get supplies to ensure the upcoming campaign. Some farmers will have to make choices if market tensions continue.
« What awaits Africa or Latin America in a year promises to be tragic predicts a Geneva-based fertilizer trader. The prices of urea, potash and phosphate have jumped by 30 or even 40% since the start of the war in Ukraine, when they had already reached peaks at the end of 2021. To this must be added the increase in the price of gas which is used in the composition of nitrogen fertilizers.
The tension on the market comes from the stoppage of exports from Ukraine and especially from Russia, Russia being a major supplier of both inputs, but also of raw materials which go into their manufacture such as sulfur or ammonia, whose pipeline leading to the Black Sea had to be shut down. Moscow has asked Russian fertilizer producers not to export anymore. A directive that adds to an inability to export. Three of the four big owners of Russian fertilizer companies are targeted by sanctions, which only increases the nervousness of the banks.
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India, Brazil or the African continent particularly vulnerable
The crisis is penalizing fertilizer manufacturers such as the Office Cherifien des Phosphates in Morocco and, by extension, their customers. OCP usually supplies itself with Russian and Belarusian potash to manufacture NPK, a fertilizer sold in particular to several West African countries (Benin, Togo, Mali, Senegal). The OCP will therefore perhaps tomorrow be forced to concentrate on the production of phosphate fertilizers to the detriment of NPK. Brazil, which imports 12 million tons of potash every year, usually gets half of it from Russia. Hence the despair of importers today who no longer know where to turn. Same concern in India, the other big importer of fertilizers which has just increased its purchases in Canada, Israel and Jordan to meet its needs estimated at 30 million tonnes according to the government.
To a lesser extent, the concern also concerns Europe. Only the United States self-sufficient in fertilizers should not suffer from the current crisis. China could also do better than the others, thanks to its good relations with Russia.
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