Fears that the global energy crisis will lead to famine in vulnerable countries

Fears that the global energy crisis will lead to famine in vulnerable countries

The global energy crisis could escalate into a global food crisis leading to famine in vulnerable countries unless urgent action is taken, one of the world’s largest fertilizer producers has warned.

Svein Tore Holsether, chief executive of Yara, which annually produces 8.6 million tonnes of ammonia, the key ingredient in fertilizers, said the high costs of gas meant it was cutting production in Europe by 40%.

The Norwegian company, which has production facilities in more than 50 countries including the United Kingdom, has been able to maintain its supplies of soil improvement products in Europe by importing ammonia from its facilities elsewhere in the world, where gas prices are cheaper.

However, Holsether warned that there was no guarantee the process could continue. “It is important to get the message across that the current energy crisis could be the start of a food crisis,” he said.

“We need to pay special attention to all those affected by the rising prices of utilities and food, but for some it is a matter of life or not. These are scenarios of famine and food scarcity.

He added: “The closures we are experiencing across Europe are now having an impact on fertilizer prices globally. All the main nutrients used by farmers are [priced] significantly higher than a year ago, in part due to higher demand and higher costs of fertilizer production. It has an immediate impact. “

The global price of urea, a fertilizer ingredient, for example, is now at $ 850 (£ 615) per tonne, up from around $ 260 a year ago.

Julia Meehan, fertilizer manager for the commodity prices agency ICIS, admitted that there was “a serious global problem”. She said China is implementing a fertilizer export ban, Russia is considering a ban, and Turkey, a major fertilizer exporter, has stopped shipments.

“We are seeing record prices for every type of fertilizer, all of which are well above previous highs in 2008. This is very, very serious. People don’t realize that 50% of the world’s food depends on fertilizers, ”Meehan said.

She said crop prices were at record highs and food shortages could be felt in the spring and summer of 2022.

“Farmers are considering replacing their grain crops such as wheat and barley, which require fertilizers containing high levels of nitrogen, with beans and legumes which do not,” he said. she declared. “But this is not just about grains, it will also have an impact on the crops that are used to feed livestock and other animals as well. “

The National Farmers Union has warned that UK farmers are facing difficulties as fertilizer prices have tripled or quadrupled from last year.

Availability is also at risk as production at one of the two main UK fertilizer facilities is suspended and the other continues to operate only with financial support from the government.

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While the UK usually imports a large amount of fertilizer, global production issues can make this more expensive and more difficult than usual. Tom Bradshaw, NFU Vice President, said: “There is a real urgency to this. ”

Most UK farmers won’t need fertilizer until February, but he said driver shortages and logistical delays meant there were concerns over whether sufficient deliveries could be made. to farms on time.

He said farmers would also be tempted to save money by putting less fertilizer on crops, thereby reducing yields, adding: the significant increase in [costs] they will produce less and that will leave the [UK food produce] market runs next year.

Holsether said it was not clear what would happen in the coming months as the energy situation was “very dynamic.” He said the company was negotiating contracts with its customers that would help determine whether it was economical to increase production.

Last year, Yara donated 3,000 tonnes of fertilizer to small-scale African farmers in partnership with the United Nations World Food Program. Holsether said the company will consider a similar effort again and called on other companies to join us.

A WFP spokesperson said: “We are concerned about anything that could cause food prices to rise and put millions more people into hunger. We have collaborated with Yara on initiatives such as the Farm to Market Alliance because we are very aware that we will never solve the food crisis the world faces without the private sector.


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