Moscow’s invasion of Ukraine highlighted the role of fertilizers — and who controls them — as a strategic lever of global influence
“The role of fertilizer is as important as the role of seed in the country’s food security,” said Udai Shanker Awasthi, managing director and chief executive officer of the Indian Farmers Fertiliser Cooperative, the country’s largest producer. “If your stomach is full then you can defend your house, you can defend your borders, you can defend your economy.” Last year’s jolt to the $250 billion global fertilizer industry highlighted the role of Russia and Belarus as exporters of almost a quarter of all world crop nutrients. While Russia’s agricultural products including the three main types of fertilizer — potash, phosphate and nitrogen — are not targeted by sanctions, exports remain curtailed through a combination of disruptions to ports, shipping, banking and insurance. Russian fertilizer billionaire Andrey Melnichenko, the founder of EuroChem Group AG, argues the European Union’s sanctions regime has clogged up trade to such an extent that it’ll have caused a total curtailment of fertilizer shipments by some 13 million tons by the one-year mark of the war on Feb. 24. Melnichenko is himself subject to sanctions. It was Russian fertilizer caught in limbo in the Netherlands that was freed as part of a wider UN deal to allow grain transports via the Black Sea. The batch that began arriving in Malawi earlier in February was the first of several proposed shipments of fertilizer stranded in ports from the Baltic Sea to Belgium and “donated” by Russia’s Uralchem-Urakali Group. Uralchem is planning a handover ceremony with Malawi’s government to be attended by the Russian ambassador on March 6. The market disruption triggered a spike in prices last summer that led to stockpiling by those able to afford fertilizers, and while costs have since come down significantly, they remain above pre-pandemic levels. Supplies are constrained in poorer areas. The situation is exacerbated by sanctions on potash giant Belarus alongside the decision by China, a major producer of nitrogen and phosphate fertilizers, to impose restrictions on exports to protect domestic supply, curbs that analysts don’t see being lifted until the middle of 2023 at the earliest. The result has been an all-too familiar divide: Bloomberg Intelligence analyst Alexis Maxwell says that even though prices have fallen more than 50% from last year’s peak, farmers in Southeast Asia and Africa remain more exposed than their counterparts in North America, China or India. The African Development Bank has warned that curtailed use is likely to mean a 20% drop in food production, while the WFP sees smallholders in the developing world at risk of “a major food availability crisis as the fertilizer crunch, climate shocks and conflict upend food production.” Indonesian President Joko Widodo warned at the Group of 20 summit he hosted in November of “a more dismal year” ahead without immediate steps to ensure availability of affordable nutrients. Indian Prime Minister Narendra Modi, who now holds the G-20 chair, pledged to focus efforts to “depoliticize” global fertilizer supply, “so that geopolitical tensions do not lead to humanitarian crises,” he wrote in the Times of India in December. The geopolitical fallout is being felt as far away from Ukraine as Canada, the world’s biggest potash producer (Russia and Belarus are No. 2 and No. 3 respectively). Brazil’s agriculture minister traveled there immediately after the war’s outbreak to secure more shipments for the food-exporting superpower, while Prime Minister Justin Trudeau’s government has said it’s looking at increasing exports to Europe of “strategic commodities” including potash. Nutrien Ltd., the world’s largest fertilizer company and the biggest private employer in its home base of Saskatoon in Canada, is expanding production at its potash mines, helping fuel the city’s spread out into the great prairie lands of central Saskatchewan. BHP Group Ltd gave the green light to build its own massive potash mine in Saskatchewan about 18 months ago; it’s already looking at options to accelerate an expansion that would see total output double. Nutrien mines potash from a 400 million-year-old rock known as the Prairie Evaporite Formation at a depth of some 1,000 meters (3,280 feet). This far down, the heat is a stark contrast with the sub-zero temperatures outside in the Saskatchewan winter. The air has an ocean tang that comes from the high concentration of salt in the potash. Huge boring machines cut tunnels to extract the ore, which is moved by conveyors to underground storage areas, then taken to the surface and on-site mills. The US both produces fertilizer and is a major importer, and for now its farmers still have access to plenty of nutrients. That can’t be said of some of its neighbors. Latin America depends on imports for 83% of fertilizers applied, mostly from Russia, China and Belarus, according to the Washington-based International Food Policy Research Institute. President Vladimir Putin blames sanctions for the disruption in fertilizer supply from Russia, saying in late November that more than 400,000 tons were frozen in European ports. A portion of that amount has since been unfrozen and donated. The UN says the core problem lies with shipping insurers unwilling to cover Russian cargoes, and with key agriculture banks being unable to make financial transactions since they are disconnected from SWIFT. The EU and US issued a joint statement in November clarifying that “banks, insurers, shippers, and other actors can continue to bring Russian food and fertilizer to the world.” NN: China and Russia have jointly put a strangle hold on the worlds key commodities. Not just oil, but fertilizer, grains, strategic metals like cobalt and Lithium. That was while your leaders have decided its a matter of human rights that kids are raised gender fluid….. And the crises you face are global warming, or cooling… ozone holes that need to be plugged along with all mines and oil wells… good luck!