A Norwegian fertilizer company, Yara International, sounded the alarm at the World Economic Forum in Davos this week, saying a catastrophic food crisis lies on the horizon.
In late February, Russia’s invasion of Ukraine prompted retaliatory sanctions by the United States and its Western allies, which in turn led to a collapse in Russian fertilizer and Ukrainian grain exports.
According to Yara’s CEO, Svein Tore Holsether, the conflict has caused at least 15% of the world’s fertilizer supply to vanish from commodity markets. Additionally, approximately 25 million tons of corn and grain languish in Black Sea ports.
Holsether told Reuters, “Currently, we have an extreme combination of events when food supplies are going down, fertilizers supplies are doing down, gas supplies are going down, and prices for gas and fertilizers are rising.”
Fertilizer production in Europe depends heavily on ready access to natural gas. Before the EU levied sanctions against Russian energy, Russian natural gas constituted 40% of European gas imports.
“We need to build a system that is less reliant on Russia and is more green, including by using renewable energy for fertilizer production,” said Holsether.
With fertilizer supply in sharp decline, overall global food production is expected to decline significantly. Food insecurity is poised to skyrocket, particularly in parts of Africa like Ethiopia, Madagascar, South Sudan, and Yemen, countries which already suffer acute food insecurity.
Holsether stressed, “We need to work on an emergency response for the most vulnerable. For that, we urgently need to unlock funds of the World Food Programme, which has a $10 billion funding gap,” he said.
Yara International urged donors at the economic forum to close the funding gap as soon as possible.
According to Reuters, the WFP’s financial woes are mainly due to food, fuel, and transportation costs, which have skyrocketed. However, donors like the oil-rich Gulf countries have failed to make good on already agreed-upon contributions.
