The international price of fertiliser has reached its highest ever recorded levels, with the ongoing conflict between Russia and Ukraine being cited as the main driver. According to the CRU Group, its fertiliser price index has reached a shocking figure of 377.
The UK-based company, which monitors market information for metals, fertiliser and mining says that the index has increased by 30% since the beginning of 2022 and this beats the previous high figure of 360, recorded in 2008.
The index takes into consideration minerals such as phosphate, potash and nitrogen; all of these are also reaching their individual record prices. The group also predicts that the price of fertiliser will increase beyond its current high, sparking concerns among farmers and agricultural industries across the globe.
Farmers scrambling to make changes
Sanctions imposed by the West on Russia, a significant exporter of potash, ammonia, urea, and other soil nutrients, have interrupted supplies of those critical inputs all over the world. Fertiliser is essential for maintaining high yields of corn, soy, rice, and wheat.
“Since the beginning of 2020, nitrogen fertiliser prices have increased fourfold, while phosphate and potash prices over threefold,” said Chris Lawson, head of fertiliser for CRU Group to AgriLand.
“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.”
According to Lawson, a lengthy period of fertiliser under-application – due to a lack of supply – will have a long-term impact on tillage yields, potentially contributing to food price inflation.
The pivot can be observed in Brazil’s agricultural powerhouse, where some farmers are using less fertiliser on their corn and some federal legislators are advocating for the mining of potash on protected indigenous territories.
Small farmers in Zimbabwe and Kenya are turning to manure to feed their crops. One canola farmer in Canada has already started stockpiling fertilizer for the 2023 season, anticipating even higher costs, according to Reuters.
Some growers are considering switching to crops with lower fertiliser requirements. Others intend to cultivate a smaller area. Others believe they’ll just use less fertilizer, which crop experts say will reduce yields. The most vulnerable countries are those in underdeveloped countries, where farmers have fewer financial resources to weather the storm.