Prior to the ongoing Russia-Ukraine crisis, global food prices had reached an all-time high stemming from a wide array of factors such as high energy prices and fertilizers. The two rivalries are major players in global food and agricultural products. Unequivocally, the crisis has interrupted the production of agricultural products leaving both short-term and long-term implications forthcoming.
In 2020, for instance, Russia ranked as the top exporter of nitrogen fertilizers, the second leading supplier of potassium, and the third-largest exporter of phosphorous fertilizer, at least according to a report published by the U.N. Food and Agricultural Organization. Also, Russia’s and Ukraine’s wheat exports combined accounted for 30% of the global market in 2021. As such, the crisis between the two nations continues imposing profound challenges related to food security for many countries across the world, especially low-income countries that depend on food imports.
“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,” commented Chris Lawson, head of fertilizers at CRU Group.
The ripple effects of the crisis can be monstrous. As affected countries try to preclude further adversities, for instance, they’ll need to source agricultural products and fertilizers from other regions which will directly impact shipping costs.
According to the report, Prior to the conflict, FAO expected Ukraine to export around 6 million tonnes of wheat between March and June 2022, and the Russian Federation to export 8 million tonnes during this period.
The disruption doesn’t just affect wheat and fertilizers but other products like maize and oil crops as well. Since there’s still uncertainty about what lies ahead in relation to the crisis (its duration and intensity) espousing global food security remains at the core although subject to a colossal of vagaries.