Russia’s war against Ukraine and the resulting sanctions are pushing the world into a food crisis, according to fertilizer and coal billionaire Andrei Melnichenko.
Russia, which accounts for 13 percent of global fertilizer output, is the largest exporter of urea and second in potash exports. It’s also a major producer of fertilizers containing nitrogen and phosphate.
Soaring prices of natural gas, a key component of nitrogen-based fertilizers, were already pushing up product prices. With the West placing sanctions on Russia for its military incursion into Ukraine, fertilizer supply from Moscow could be severely disrupted. Higher prices would add to the cost of food production, driving up prices globally.
Russian President Vladimir Putin warned on March 10 that if the West created impediments for Russian fertilizer exports, food prices would soar around the world.
Countries that are the weakest financially are poised to be hardest hit in the event of a severe food supply disruption. At least 50 nations depend on Ukraine and Russia for 30 percent or more of their wheat supply.
When natural gas or oil prices rise, the price of nitrogen fertilizer rises as well, he pointed out, adding that the last time this occurred was around 2008, when 150 million people were pushed into chronic malnutrition.
“I really fear that’s happening right now,” Raizada said.
If the conflict results in reduced exports from Russia and Ukraine beyond the 2022-23 season, and crude oil prices remain at high levels, it could create a “considerable supply gap” in global sunflower seed and grain markets, the organization warned.