Fears are growing that the global energy crisis could cause famines in vulnerable countries

This story was originally published by The Guardian and appears here as part of the Climate Table collaboration.

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

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

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

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

“We have to pay special attention to all those affected by the increase in the prices of public services and food, but for some, it is a question of living or not. These are scenarios of famine and food shortages. “

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 (price) significantly higher than a year ago, in part due to increased demand and increased cost of fertilizer production. That is having an immediate impact. “

The global price of the fertilizer ingredient urea, for example, is now $ 850 a ton compared to $ 260 a year ago.

Julia Meehan, director of fertilizers at commodity pricing agency ICIS, agreed that there was “a serious global problem.” He said China was establishing a fertilizer export ban, Russia was considering a ban and Turkey, a large fertilizer exporter, stopped shipments.

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

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

“Farmers are talking about changing their cereal crops like wheat and barley, which require fertilizers that contain high levels of nitrogen, for beans and legumes, which do not need any,” he said. “But this is not just about grains, it will also affect the crops that are used to feed livestock and other animals as well.”

The National Farmers Union warned that UK farmers were facing difficulties as a result of fertilizer price hikes that tripled or quadrupled last year.

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

While the UK generally imports a large amount of fertilizer, global production problems can make it more expensive and difficult than usual. Tom Bradshaw, vice president of the NFU, said: “There is a real urgency in this.”

Most farmers in the UK won’t require fertilizer until February, but he said a shortage of drivers and delays in logistics meant there were concerns about whether enough 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: “We have high prices for commodities right now and normally in response to that, farmers produce more. But there is a real possibility due to the significant increase in (costs), they will produce less and that will leave the market (for UK food products) short next year. “

Holsether said it was unclear what would happen in the coming months as the energy situation was “very dynamic.” He said the company was negotiating with customers contracts that would help determine whether it was economical to expand production.

Yara donated 40,000 tons of fertilizers to small farmers in Africa in partnership with the United Nations World Food Program. Holsether said the company would consider a similar effort again and asked other companies to join.

A WFP spokesperson said: “We are concerned about anything that could lead to higher food prices that would starve millions more. We have worked together with Yara on initiatives such as Farm to Market Alliance because we are very aware that we will never solve the food crisis facing the world without the private sector ”.